* Drivers say app-based car service violates taxi rules
* U.S.-based Uber says taxi industry is protectionist
* Uber offers discounts, usage soars (Updates with quotes, reactions)
By Jack Stubbs and Brian Love
LONDON/PARIS, June 11 (Reuters) - Taxi drivers sowed traffic chaos in Europe’s top cities on Wednesday by mounting one of the biggest protests ever against Uber, a U.S. car service whose smartphone app summons rides at the touch of a button.
Hundreds of licensed black taxis snarled traffic in the streets around Trafalgar Square in central London, hooting their horns as they passed Downing Street, home of Prime Minister David Cameron, and the Houses of Parliament.
In Paris, taxis slowed traffic on major arteries into the city during the morning commute. Hundreds choked the main road to Berlin’s historic centre while commuters packed buses and trains, or just walked, to get to work in Madrid and Barcelona.
San Francisco-based Uber Technologies Inc., valued last week at $18.2 billion just four years since its 2010 launch, has touched a raw nerve by bringing technological advances to one of the most visible and regulated services in modern city life.
Uber customers order and pay for a taxi with its application on their smartphones. Instead of having taxis prowl city streets looking for customers, Uber links to smartphone GPS systems to locate app users and have a nearby car go pick them up.
“This about an all-out assault on our profession, our livelihoods,” said Max Small, a London taxi driver for 34 years. “These big companies are coming in, not playing by the rules.”
Taxi drivers across Europe say Uber breaks local taxi rules, violates licensing and safety regulations and its drivers fail to comply with local insurance rules.
Uber, backed by investors such as Goldman Sachs and Google, refutes that criticism and argues it complies with all local regulations.
“What you are seeing today is an industry that has not faced competition for decades,” said Pierre-Dimitri Gore-Coty, Uber’s Regional General Manager for Europe.
“Now finally we are seeing competition from companies such as Uber which is bringing choice to customers,” he said, adding the taxi industry in most countries was “highly regulated” and “not pro-consumer”.
Uber has expanded rapidly since it was founded by two U.S. technology entrepreneurs, Travis Kalanick and Garrett Camp, and now operates in 128 cities across 37 countries.
Uber Chief Executive Officer Kalanick last week announced $1.2 billion in new funding, valuing the company at $18.2 billion, one of the highest valuations ever for a Silicon Valley startup.
But ordinances keep it out of cities such as Las Vegas and Miami. In Chicago, San Francisco and Washington, D.C., Uber and similar companies have faced lawsuits from taxi companies hoping to keep the new competition out.
In London, the European Union’s biggest city by population, police helicopters monitored the traffic snarl around the Houses of Parliament as mopeds and cyclists weaved through the chaos and crowds of bemused tourists looked on.
Uber says its minicabs arrive in five minutes in central London and fares are 30 to 50 percent cheaper than a black cab.
“It’s no surprise they’re taking business away from the cab drivers ... but it’s adapt or die,” said Callum, a 24-year-old publicist from London.
Uber also provides an app for drivers to calculate the cost of each journey, which black taxi drivers say is effectively a taximeter and thus contravenes a 1998 British law reserving the right to use a meter for licensed cars.
Transport for London, the city’s transport regulator, says it thinks smartphone applications do not constitute a taximeter but has asked the High Court for an opinion.
After the disruptions, Uber hit back in Germany by emailing clients to offer a 50 percent discount on all shared rides for the rest of the day. In London the company took out a full page advertisement in the evening papers offering new customers 20 pounds ($33.58) off their first journey.
Uber UK & Ireland General Manager Jo Bertram said the app had an 850 percent increase in new customers on Wednesday, the most in one day since it launched in London two years ago. ($1 = 0.5956 British Pounds) (Writing by Guy Faulconbridge; Additional reporting by Sonya Dowsett and Paul Day in Madrid, Nicholas Vinocur in Paris, Robin Emmott in Brussels and Anja Nilsson in Berlin; Editing by Tom Heneghan)