Uber de­fends busi­ness model

Arab News - - BUSINESS -

LUX­EM­BOURG: Uber de­fended its busi­ness model in Europe’s high­est court on Tues­day, say­ing its ser­vice had made it eas­ier for peo­ple to get around and cut pol­lu­tion as it fights a case which could leave app-based star­tups fac­ing tougher reg­u­la­tion.

The ride-hail­ing app, which ex­panded into Europe five years ago, has come un­der at­tack from es­tab­lished taxi com­pa­nies and some EU coun­tries be­cause it is not bound by strict lo­cal li­cens­ing and safety rules which ap­ply to some of its com­peti­tors.

Uber’s dis­pute with Barcelona’s main taxi op­er­a­tor, which in 2014 ac­cused it of run­ning an il­le­gal taxi ser­vice via its UberPOP ser- vice, is seen as a land­mark case which could lead the Court of Jus­tice of the Euro­pean Union (ECJ) to la­bel it a trans­port com­pany rather than a dig­i­tal ser­vice.

Such a rul­ing would sub­ject the com­pany to stricter rules on li­cens­ing, in­surance and safety, with pos­si­ble knock-on ef­fects on other star­tups such as on­line home rental com­pany Airbnb and food de­liv­ery com­pany De­liv­eroo, other big brands in the shar­ing econ­omy.

It could also limit ef­forts by the Euro­pean Com­mis­sion to boost e-com­merce, a sec­tor where the EU lags be­hind Asia and the United States, to drive eco­nomic growth and cre­ate jobs.

“Uber is part of a wave of tech­nol­ogy which rad­i­cally changes the way we shop, ob­tain in­for­ma­tion,” Uber’s lawyer Cani Fer­nan­dez told a panel of 15 judges at the ECJ.

“Uber con­trib­utes to link­ing driv­ers and pas­sen­gers more ef­fi­ciently,” she added, point­ing to im­prove- ments in get­ting around, lower pol­lu­tion and eas­ier ac­cess to park­ing.

Uber is val­ued at more than $60 bil­lion and its in­vestors in­clude Gold­man Sachs and GV, for­merly known as Google Ven­tures.

It has faced protests, bans and le­gal ac­tion around the world in­clud­ing in the United States and much of Europe as it dis­rupts ex­ist­ing busi­ness prac­tices.

In this lat­est case, Barcelona’s main taxi op­er­a­tor ar­gues Uber has an un­fair ad­van­tage be­cause it does not bear the costs which taxi com­pa­nies face.

“If there is a trans­port ser­vice pro­vided, a com­pany should not be able to hide be­hind the thin veil of a dif­fer­ent ser­vice,” its lawyer Montse Balague Farre said.

Lawyers for Spain, Ire­land and France also ar­gued that Uber should be treated as a trans­port com­pany.

The Nether­lands where Uber has its Euro­pean head­quar­ters, Es­to­nia and the Euro­pean Free Trade As­so­ci­a­tion (EFTA) how­ever said the com­pany merely pro­vides a con­nect­ing ser­vice be­tween the pas­sen­ger and a driver.

The ride-hail­ing app has come un­der at­tack from es­tab­lished taxi com­pa­nies. (Reuters)

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