21.12.2017

Uber is a transportation service, EU top court ruled

400The European Union’s top court has ruled that Uber should be regulated like a transportation service. That means the ride-sharing service must comply with tough rules that govern traditional taxi associations. Uber had argued that it’s a technology platform that connects independent drivers with passengers. The landmark ruling will require Uber to treat its drivers more like employees. The decision cannot be appealed.

“The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,” the EU Court of Justice ruled on Wednesday. The EU’s 28 member states “can therefore regulate the conditions for providing that service.”

The decision represents a significant setback for the company, which has faced a string of other legal woes across the Continent and farther afield.

It also follows a years-long battle between Uber and EU taxi associations, many of which claim that the American tech company flouts Europe’s transport rules and represents unfair competition for existing players. Uber denies the allegations.

Uber had already been forced to abandon its UberPop service in several major European countries. Instead it offers UberX which operates using professionally licensed drivers. “This ruling will not change things in most EU countries where we already operate under transportation law,” said an Uber spokesperson in response to the ruling.

The case is a culmination from over five years of disputes between the ride-sharing company and various taxi associations across Europe. Taxi groups have argued that Uber undercuts their business and should be subject to the same rules and regulations that they are. The tension has sparked violent protests in the past.

It’s a victory for Europe’s taxi companies,” said Damien Geradin, a partner at Euclid Law in Brussels. “Europe’s single market will now become very fragmented with different countries implementing different rules.”

The decision is a blow to Uber’s future expansion plans across the EU but does not represent the knockout punch that many — including the Spanish taxi association that filed the original case that led to Wednesday’s ruling — had wanted.

The ride-booking company already operates, and will continue to do so, in many European countries where its digital platform connects traditional taxis and licensed minicabs with paying customers.

European countries also will still be allowed to pass legislation that gives Uber greater freedom to operate locally. That includes in the likes of Estonia and Finland, where lawmakers have been eager to embrace the ride-booking service and other digital upstarts, which have poured into the countries’ transport industries.

However, according to lawyers, the decision will have ramifications in new markets and could cause problems in certain cities. In Brussels, for example, the company has sidestepped rules that require private-hire cabs to be booked for a minimum of three hours and for a minimum amount of €90.

The ruling could also set an important precedent affecting companies that operate in the gig economy like Foodora and Deliveroo, where workers are paid on a freelance basis or through short term contracts. The European Commission has previously said it wants to create a regulatory framework for the sharing economy, and the World Bank notes that temporary workers in the EU earn an average of 14 percent less than those with open-ended contracts.






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