European Court rules Uber is a transport service bringing stricter regulations to US firm

20 December 2017

Ride-hailing business Uber is a transport services company, and as such faces stricter regulations on its services, the European Court of Justice (ECJ) has ruled.

The decision was made after a challenge brought by taxi drivers in Barcelona. It will apply across the whole of Europe, meaning local governments can push their regulations on the company. Uber had denied it was a transport company, instead insisting that it was a computer services business. This, the firm said, meant it should be subject to an EU directive governing e-commerce and prohibiting restrictions on the establishment of such organisations.

Lawyers for Barcelona’s Asociación Profesional Elite Taxi argued that Uber was directly involved in carrying passengers. EU rules on the freedom to provide services expressly exclude transport.

In its ruling, the ECJ stated: ′The service provided by Uber is more than an intermediation service consisting of connecting, by means of a smartphone application, a nonprofessional driver using his or her vehicle with a person who wishes to make an urban journey. In this situation, the provider of that intermediation service simultaneously offers urban transport services.

′The Court notes in that regard that the application provided by Uber is indispensable for both the drivers and the persons who wish to make an urban journey. It also points out that Uber exercises decisive influence over the conditions under which the drivers provide their service. Therefore, the Court finds that that intermediation service must be regarded as forming an integral part of an overall service whose main component is a transport service and, accordingly, must be classified not as ′an information society service’ but as ′a service in the field of transport’.’

The judgement is final, and cannot be appealed. It means the company will come under stricter regulation and could bring further cases against other ride-hailing applications. States are now free to impose restrictions or conditions on Uber as they would with any other mini-cab service.

Uber said: ′This ruling will not change things in most EU countries, where we already operate under transportation law. However, millions of Europeans are still prevented from using apps like ours.

′As our new CEO has said, it is appropriate to regulate services such as Uber, and so we will continue the dialogue with cities across Europe. This is the approach we’ll take to ensure everyone can get a reliable ride at the tap of a button.’

The company has had a rough year. It has been involved in a court case with rival Waymo, and in September lost its licence to operate in London, with the city’s transport authority stating that it was ‘not fit and proper to hold a private hire vehicle licence’. The company’s founder Travis Kalanick was also removed as CEO to allow the company to grow beyond a start-up.

Photograph courtesy of iStock