Frankfurt - A US-designed smartphone application that connects passengers with cars for hire was blocked from operation in Germany by court injunction Tuesday.

The court ruled the app can no longer function within the country without an official permit under the Passenger Transport Act.

The ruling is welcome news for Germany's official taxi companies, which have long charged that the app side-steps regulations and operates without adherence to safety standards.

Uber promised to appeal.

“We will fight the decision and defend our rights to the last,” the company said in a statement.

“We believe that competition is good for everyone,” it said.

“That's why Germany is one of our fastest growing markets.”

Violators of the injunction risk a fine of 250,000 euros (R2.5 million) or imprisonment.

Uber is active in more that 200 cities worldwide with headquarters in San Francisco, California, and regional offices in Amsterdam.

The app had already been banned in Germany on a municipal basis, notably in Berlin, where authorities deemed it unsafe.

Passenger transportation should only occur under legislative oversight, said Dieter Schlenker, chairman of Germany's main taxi cooperative.

“No passenger can check the driver, business and vehicle themselves,” Schlenker said. - Sapa-dpa