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23rd May 2018

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Uber is a transport company, EU lawyer says

  • An advocate-general at the EU's top court said "the service offered by the Uber platform must be classified as a ‘service in the field of transport’". (Photo: EUobserver)

The American company Uber operates in the field of transport, and is not an information society company, a top EU lawyer said in advice to the Court of Justice of the European Union on Thursday (11 May).

The court said in a press release that, according to one of the court's advocates-general, "the service offered by the Uber platform must be classified as a ‘service in the field of transport’."

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The app's features mean that "Uber cannot be regarded as a mere intermediary between drivers and passengers", and that it "is not governed by the principle of the freedom to provide services in the context of ‘information society services’".

"Instead, the service amounts to the organisation and management of a comprehensive system for on-demand urban transport," the court's press release said.

The advocate-general's opinion is formally non-binding, but in practice is often followed by the court.

The final ruling will have repercussions for the wider phenomenon known as the sharing economy.

The opinion is a setback for Uber, which uses an online platform to connect ride-sharing drivers to people wanting to get from A to B. The passengers pay the drivers and Uber earns a fee for making the connection.

Uber has struggled with legal challenges in several EU countries since it started rolling out its services to Europe in 2012.

Especially its app, UberPop is controversial, because it involves drivers who are not in possession of a taxi license.

National authorities all over Europe have said that this amounts to unfair competition against taxi companies, and they have tried to regulate and sometimes ban Uber's activities.

Just last month, Uber pulled out of Denmark because a new national law that would treat Uber the same as traditional taxi services.

The case in the EU court was triggered in 2014 when a Spanish court asked the Court of Justice to rule on whether Uber is a transport company or an information society company.

It followed a case started by a Spanish taxi association, which saw Uber's services as unfair competition.

The EU court's final answer will have legal consequences.

Transport services, including taxis, are specifically excluded from the EU's 2006 services directive, which aims at harmonising services in the internal market.

Companies that provide information society services are covered by EU rules governing the principle of freedom to provide services. As such, they could be protected against national bans, since these may be considered discriminatory.

Last year, the European Commission gave the sharing economy the benefit of the doubt. The EU jobs, growth and investment commissioner, Jyrki Katainen, warned against the “risk of a new type of protectionism, not between nations but between old business models and new ones”.

The final ruling will likely also have consequences for other services offered in the sharing economy, which are also disrupting other business models, such as in the tourism sector.

EUobserver's annual Business in Europe magazine will come out 15 May. This year, the magazine looks at how Europe manages the sharing economy. If you would like to receive the e-version of the magazine, please register for the newsletter.

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