EU deals Uber another blow
Uber does not employ drivers or own vehicles, but relies on private contractors with their own cars Uber claims it is a mere service provider, connecting consumers with drivers in more than 600 cities
The European Court of Justice says the service is covered by services in the field of transport
France says it is determined to regulate the sector and ensure fair competition between the players
In November, a labour court in London said Uber had to pay the drivers a minimum wage and give them paid leave
luxembourg — Uber should be classified as a transport service and regulated like other taxi operators, the European Union’s top court said in a landmark ruling on Wednesday that could impact other online businesses in Europe.
Uber, which allows passengers to summon a ride through an app on their smartphones, has transformed the taxi industry since its launch in 2011 and now operates in more than 600 cities globally.
In the latest of a series of legal battles, Uber had argued it was simply a digital app that acted as an intermediary between drivers and customers looking for a ride and so should fall under lighter EU rules for online services.
“The service provided by Uber connecting individuals with nonprofessional drivers is covered by services in the field of transport,” the European Court of Justice (ECJ) said.
“Member states can, therefore, regulate the conditions for providing that service,” it said.
The case follows a complaint from a professional taxi drivers’ association in Barcelona that Uber’s activities in Spain amounted to misleading practices and unfair competition from Uber’s use of non-professional drivers — a service Uber calls UberPOP and which has since been suspended in Spain and other countries. Uber has taken the fight to regulators and established taxi and cab companies, expanding from a Silicon Valley start-up to a business with a valuation of $68 billion.
Following changes at the top and legal battles, it recently adopted a more conciliatory approach under its new chief executive Dara Khosrowshahi.
The European case had been widely watched as an indicator of how the burgeoning gig economy would be regulated in Europe.
The ECJ said Uber “exercises decisive influence over the conditions under which the drivers provide their service” and that without the Uber mobile app “persons who wish to make an urban journey would not use the services provided by those drivers.”
The decision is unlikely to have an immediate impact on Uber’s operations in Europe, where it has cut back its use of unlicenced services such as UberPOP and adheres to local transportation laws. —