Uber is pulling out of Hungary—for now. The company said on Wednesday that it will have to suspend operations due to new regulations in the country.
The European Commission may have recently pleaded with EU countries to go easy on "collaborative economy" platforms such as Uber, but Budapest is clearly not listening.
New legislation cleared the Hungarian parliament last month, requiring transport and communications authorities to block the apps of passenger transport companies that do not use a traditional dispatch service. Bans last up to a year and fines for non-compliance—which can be levied repeatedly—range up to 200,000 forints ($707).
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The law followed now-familiar protests from traditional taxi firms, furious at the competition posed by services such as Uber, which do not adhere to the same licensing standards and can offer lower prices by having drivers bear the costs of their vehicles.
"Our operation in Budapest has been one of our brightest in Europe, but at this time we and our nearly 1,200 Hungarian partners are unable to provide services under new regulations which prohibit innovation and entrepreneurship," said Robbie Khazzam, Uber's regional manager for central eastern Europe, in an emailed statement.
Uber will pull out of Budapest, where it has operated for the last two years, on July 24, when the new law comes into effect.
Khazzam said Uber hopes the suspension will be temporary "and that future dialogue in Hungary around the collaborative economy is more inclusive and forward-looking."
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At the start of June, before the new law went through, the European Commission said EU member states should avoid "imposing disproportionate obligations" on people who occasionally offer services through platforms such as Uber.
However, this plea was only guidance as there is not yet any EU-level legislation to tell countries what to do in this area.