Uber is pulling out of Hungary

REUTERS/Danish Siddiqui

Ride-hailing service Uber will suspend its operations in Hungary due to government legislation that makes it impossible for it to operate, the company said on Wednesday.

"We will be suspending Uber X in Budapest effective on July 24," Rob Khazzam, general manager for Uber in central Europe, told Reuters in an interview.

"Unfortunately, the logic of legislative developments that have unfolded in Hungary over the last 18 months have led us to this difficult decision."

In June, Hungary's parliament, where Prime Minister Viktor Orban's right-wing Fidesz party has a strong majority, passed legislation with the aim of curbing the activities of Uber.

The move followed months of protests by taxi drivers and bans on some Uber services in other countries.

The new law, which comes into force this month, will permit the Hungarian national communications authority to block internet access to "illegal dispatcher services".

Taxi drivers in Hungary have demanded Uber be outlawed and its smartphone app blocked as they say its drivers breach regulations other taxis firms must adhere to.

Uber says more than 160,000 people use its services in Budapest, but now its 1,200 drivers risk losing their driving licenses for up to 3 years despite being professionally licensed and tax compliant.

"It is not a ban. Uber has not been banned in Budapest, it is simply a forced suspension, we have been left no other alternative by the authorities in Hungary in response to these developments," Khazzam said.

Khazzam said Uber hoped to be back in Hungary.