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Court Says Uber is Definitely a Transport Company

Brian Baglow

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Uber ECJ: Company is definitely a travel business

According to the EU Court of Justice, the Ride-Hailing giant is a transport company, not a digital platform and should be regulated as such.

The European Court of Justice has ruled that Uber “must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’​​​​​​.”

This means that from a legal viewpoint, Uber will be recognised as a taxi company, rather than a digital technology platform. As such, Uber will fall under the regulations for transport companies.

‘Computer Services’ Business

Uber has denied for years that it is a transport company, arguing it is a computer services business. This position meant the company’s operations would be subject to EU legislation and directives governing e-commerce (and more importantly those which prohibit restrictions on organisations in that sector).

The court decision was made in Luxembourg, after the challenge was originally brought by taxi drivers in Barcelona. The court’s decision will apply across the whole of the EU, including the UK and cannot be appealed against.

Intermediation Service

An “intermediation service”, said to the ECJ, “the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being 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.”

“Consequently, such a service must be excluded from the scope of the freedom to provide services in general as well as the directive on services in the internal market and the directive on electronic commerce.”

“It follows that, as EU law currently stands, it is for the member states to regulate the conditions under which such services are to be provided in conformity with the general rules of the treaty on the functioning of the EU.”

Indispensible

The court found that the Uber app was indispensable for both the drivers and the persons who wish to make an urban journey,” making it more than an intermediation service.

The court also pointed out that Uber exercised ‘decisive influence’ over the conditions under which drivers worked. As such, Uber must be regarded as forming an integral part of an overall service, the main component of which was transport, concluded the court.

The Barcelona-based legal firm representing the taxi drivers who filed the lawsuit said that the ruling was “a social victory” with “great judicial significance”.

An Uber spokesperson said: “This ruling will not change things in most EU countries where we already operate under transportation law… It is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe.”

Troubled Year

The judgement rounds of something of a troubled year for the company in which…

New CEO Dara Khosrowshahi has promised change. He may have his work cut out.

 

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Brian Baglow

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