Uber dealt a fresh blow in legal case

Recommendation says ride-hailing service should have to abide by same rules as taxi industry

LONDON — Uber suffered a blow to its expansion plans in Europe on Tuesday after a senior adviser to the region’s highest court said that the ride-hailing service should have to abide by tough rules governing taxi services.

The recommendation, a nonbinding opinion by an advocate general for the Court of Justice of the European Union, adds to an array of challenges that Uber is facing worldwide. This year alone, the company has grappled with a sexual harassment scandal and the resignation last month of its chief executive, Travis Kalanick.

The case before the court hinged on whether Uber should be treated as a taxi service in France, and therefore be subject to rigorous safety and employment rules, or as a digital platform that merely connected independent drivers with passengers.

French authorities brought criminal proceedings last year against the ride-hailing service for infringing a law that required any vehicle carrying passengers for a fee to be licensed as a taxi service and to have appropriate insurance.

Uber had argued that the law was also a “technical regulation” over digital services. That being the case, the company said, French authorities were required to notify the European Commission, the executive arm of the European Union, before adopting the legislation. Because France did not do so, Uber contended, the law could not be enforced.

The senior adviser, Maciej Szpunar, an advocate general of the court, recommended Tuesday that Uber was effectively a taxi service. He wrote that France could ban certain types of transportation services it deemed illegal, including Uber’s low-cost service UberPop, without having to notify the European Commission.

“We have seen today’s statement and await the final ruling later this year,” an Uber spokesperson said in a statement.

She said that the company had stopped offering the services in question and that it now worked only with professionally licensed drivers in France.

The latest recommendation came less than two months after Szpunar delivered a similar opinion to the court, arguing that Uber should have to comply with rules governing transportation companies. A final ruling in that case is expected by late summer, and a decision related to Tuesday’s case is due by the end of the year.

The court typically follows the recommendations of its senior advisers, but it could still rule in the company’s favour.

“The two ways Uber sold itself — as a digital company and as a ridesharing service — don’t stand up, according to this legal opinion,” said André Spicer, a professor of organizational behaviour at the Cass Business School at City University in London. When companies like Uber and Airbnb, the short-term rental company, set up, he said, “They skirted around national laws, and that was what made them competitive and cheap.” He added, “Many national regulators are beginning to chip away at that.”

Uber already operates in many European cities in compliance with transportation rules, but some of its services — particularly those that do not require drivers to have a taxi licence — have been banned and face stiff opposition.

In France, protests against Uber have at times turned violent. The company and two of its executives have also been convicted and fined the equivalent of nearly $500,000 in France for running an illegal transportation service in a case related to UberPop, which did not require a professional livery licence. That service was suspended after a series of strikes by taxi unions led to a ban in France.