The EU's top court ruled on Wednesday that Uber is an
ordinary transportation company instead of an app and should be
regulated as such, in a decision that is being closely watched around
the world.
Hailed by the plaintiffs — a Spanish taxi
association — as “a social victory”, the case is yet another thorn in
the side for US-based Uber, which has drawn the fury of taxi drivers and officials for flouting local regulations.
It
also comes the same week as one of its drivers admitted to the
attempted rape and murder of a British embassy worker coming home from a
night out in Beirut, Lebanon.
“The service provided by
Uber connecting individuals with non-professional drivers is covered by
services in the field of transport,” said the Luxembourg-based European
Court of Justice (ECJ).
“Member states can therefore regulate the conditions for providing that service.”
Uber,
the biggest name in the growing gig economy, claims it is a mere
service provider, connecting consumers with drivers in more than 600
cities.
Uber has run into huge opposition from taxi
companies and other competitors who say this allows it to dodge costly
regulations such as training and licensing requirements for drivers and
vehicles.
The case was brought by a taxi drivers'
association in the Spanish city of Barcelona, where belief runs high
that Uber is a taxi company that should be subject to rules governing
such vehicles.
“This will truly represent a social
victory, and the whole of society will benefit from this,” Ivan Esma,
spokesman for the Elite Taxi association, told reporters, adding that
“the road will be long” for the ruling to be enforced.
Ruling 'won't change things'
Uber said the ruling would make little difference in practice.
“This
ruling will not change things in most EU countries where we already
operate under transportation law,” an Uber spokesperson said in an
emailed statement.
“However, millions of Europeans are still prevented from using apps like ours.”
In
a dense legal judgement, the ECJ said that Uber was a service that
connects “by means of a smartphone application and for remuneration
non-professional drivers using their own vehicle with persons who wish
to make urban journeys.”
That means it is “inherently
linked to a transport service and, accordingly, must be classified as a
'service in the field of transport' within the meaning of EU law”.
The EU court's senior adviser had said in a legal opinion in May that Uber was indeed a transport company.
Uber
has had a rough ride in Spain, where a judge ruled in 2014 that its
UberPop service risked breaking the law, leading to the Barcelona
submission to the ECJ.
Early last year it decided to
only operate a limited a version of its UberX service in Spain which
uses licensed, professional drivers instead of the amateurs who had
previously worked via the UberPop application.
Uber has
already had problems with the law in several European countries,
particularly France where the company was forced to overhaul its
business model.
In November, a labour court in London,
where the company is threatened with losing its license, said it had to
pay the drivers a minimum wage and give them paid leave.
Uber
does not employ drivers or own vehicles, but instead relies on private
contractors with their own cars, allowing them to run their own
businesses.
Licensed taxi drivers meanwhile often have
to undergo hundreds of hours of training, and they accuse Uber of
endangering their jobs by using cheaper drivers who rely only on a GPS
to get around.
