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Raid on Uber Hong Kong offices as 'law takes time to catch up with technology', says expert

Five drivers for online taxi company Uber have been arrested in Hong Kong and two of the company's offices have been raided by police, according to the South China Morning Post14 Aug 2015

The operation, codenamed Cellbreaker, is part of a police crackdown on unlicensed transport services in Hong Kong, the South China Morning Post said.

Uber has faced similar difficulties in many markets as its disruptive technology raises questions about what the law should allow, said Hong Kong-based technology law expert Paul Haswell of Pinsent Masons, the law firm behind Out-Law.com.

"Hong Kong is no different from other jurisdictions who, whilst on the one hand welcoming the innovation that Uber brings to the market, are concerned at legal and regulatory issues connected with the service. The Uber situation is a reminder that whilst innovation is welcome, it must be within the boundaries set by the law, and the law often takes time to catch up," Haswell said.

Risk management expert Peter Bullock, also of Pinsent Masons said that Uber faces more regulatory problems in mature economies where laws are in place and have yet to adapt to suit new technology.

"It appears that the more mature the economy, the higher the regulatory hurdles placed in Uber's way," he said.

"They have significant difficulties in the US and many western European jurisdictions, but tend to flourish in emerging economies. This may be more about the practicalities of enforcing regulations in places where the rule of law is paramount, and less about local protectionism. Hong Kong falls into the 'mature economy' camp," Bullock said.

In the Hong Kong operation, undercover police officers pretended to be customers and hired cars using the Uber app. The drivers were arrested at their destination and detained for allegedly using a car for hire without a permit and driving without suitable insurance. They were later released on police bail. Five vehicles were also impounded, the South China Morning Post said.

"We are confident that there is sufficient evidence to prosecute the drivers," chief inspector Bruce Hung Hin-kau of the police traffic unit told the South China Morning Post. "We will seek legal guidance … if there are any problems," he said.

Officers later raided two Uber offices. Three staff were arrested, and computers and documents were seized, the South China Morning Post said.

The EU's highest court is due to rule on whether ride-sharing application Uber should be regulated as a 'digital service' or a transport company.

In Germany the company has been accused of operating a business without ensuring its drivers have the necessary permits for transporting passengers; while France has banned the budget 'UberPop' app under regulations applicable to chauffeur services.