TAIPEI (Taiwan News) -- Ride-hailing company Uber will not have to pay a fine of NT$100 million (US$3.2 million) as the Ministry of Transportation’s Directorate General of Highways (DGH) did not have jurisdiction in the matter, the Taipei High Administrative Court ruled today.

The company was banned in Taiwan from February until April 2017, when it launched a new service in cooperation with legal rental car agencies. However, the DGH claims that later in 2017, Uber recruited drivers directly through the internet and dispatched them to carry passengers in Taipei City and Taichung City via the Uber app.

After the drivers took their passengers to their destinations, the customers paid with a credit card and Uber and then distributed the fares among the accounts of the drivers who accepted the dispatch.

The DHG said this constituted a violation of Article 77 of the Highway Act (公路法) and imposed four fines of NT$25 million for four infractions, including three in Taipei and one in Taichung, totaling NT$100 million. The DHG also ordered that Uber suspend its operations in Taiwan.

Uber refused to accept the fines and filed an administrative lawsuit, advocating that they involved the usage of an app network platform in the company's business model, much like other companies such as find taxi, PChome, and Yahoo! Auctions. Like other network platform operators, Uber claimed that it does not operate a taxi transport service.

Uber further argued that according to the relevant provisions of the Highway Act, the Ministry of Transportation and Communications and municipalities directly under the central government should handle the case, rather than the DHG.

The Taipei High Administrative Court ruled today that after an investigation, it found that Uber is based in Taipei, but did not apply with the Taipei City Government Department of Transportation for approval to operate a taxi passenger transport service. The court ruled that this was an obvious violation of the Highway Act, and it is up to the Taipei City Government Department of Transportation to take disciplinary action.

However, the court ruled the DHG has no jurisdiction over the taxi and passenger transport industry in Taipei. The court said the DHG has no discretionary power, and the punishments meted out were illegal.

Therefore, the court chose to revoke the fine and said that Uber is exempt from punishment due to the DHG's lack of jurisdiction in the matter. The case is subject to appeal.

This is the second time since December of last year that Uber has won an appeal of fines after the court decided that the DHG lacked proper jurisdiction.