The Court of Justice of the European Union, the highest court for European affairs, has issued a long-awaited ruling on Uber, the popular private transport service halfway between a taxi and chauffeur-driven car rental, which is used with a 'app. The court ruled that Uber should be viewed as a taxi service, and not as a digital platform as the company has long argued.
The consequences of the ruling could be very significant: Uber, like many other startups in the sharing economy field, has always benefited from the fact that it operates in a gray area thanks to which it has been able to reduce costs and offer a service at competitive prices. Now it will probably have to comply with the safety regulations and trade union rules for taxi drivers in all 21 countries of the Union in which it operates.
# ECJ will tomorrow deliver its judgment in the case #Uber Systems Spain https://t.co/qPh2DS0Dbt – for background info. see press release on AG's Opinion https://t.co/auyd6nk0uW
– EU Court of Justice (@EUCourtPress) December 19, 2017
The trial came to court after a Barcelona taxi syndicate sued Uber for unfair competition in 2014. After the lawsuit, Uber had suspended its activities in Spain and then resumed them in the following months, but only in Madrid. Uber defended itself by claiming to be a simple digital platform that connects drivers with customers, and not a transport service. And therefore of not having to comply with all the regulations – and costs – that exist for the latter.
Over time, Uber's position had changed: it recently signed agreements with the governments of various countries – such as Italy – that bring its condition closer to that of taxi drivers. At the moment, Reuters writes, it operates without restrictions only in Poland, the Czech Republic, Slovakia and Romania. Agreements of this type have made relations between the national authorities and Uber more relaxed, but have effectively halted the expansion of the company in Europe. Today it is worth around 70 billion dollars, but the ruling of the Court of Justice could cause it several economic problems and perhaps revise its growth forecasts.
At the center of the case against Uber was UberPop (which in several countries is called UberX), whose drivers do not have a professional license as taxi drivers but are simple people with a car who want to earn by offering rides around their city. UberPop, whose prices are lower than the “normal” Uber, was also introduced in Italy, in Milan, but was then withdrawn after a ruling by the Milan court that declared it illegal. UberPop had been highly contested by Italian taxi drivers, as has happened and continues to happen in several European countries.
UberPop was also mentioned in the opinion of the Court's Advocate General who examined the case. The opinion of the Advocates General is not binding, but in general it tends to be respected by the judges: something that was also the case in this case. According to this opinion, the Court had to decide to consider Uber a taxi service because «from an economic perspective the transport service is the main component, while that of connecting people and drivers with an app remains secondary.
After the ruling, an Uber spokesperson said that “this ruling will not lead to changes in most of the EU countries where we already have a presence and in which we operate under the transport law” and that the company will continue “the dialogue with cities across Europe with the aim of guaranteeing everyone a reliable service just a click away “.
