Wednesday

24th Jan 2018

Uber is a transport service, EU court rules

  • Uber drivers will need the same permits as taxi drivers do, after the Court of Justice ruled that Uber is covered by transport legislation (Photo: Josh Feiber)

US tech giant Uber's app connecting drivers and passengers is a transport service, the Court of Justice of the European Union ruled on Wednesday (20 December).

Consequently, national governments have the right to demand that Uber drivers request the same permits and authorisations required of taxi drivers.

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The ruling is a setback to Uber, which had hoped to be considered purely as an information service.

If the court had classified Uber as a digital service, it would have been able to profit from EU rules on the internal market and the electronic commerce directive.

Instead, the court ruled, according to a press statement, that the app "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".

The court said that Uber provided "more than an intermediation service". It said that the application connecting drivers and passengers was indispensable for the system to operate, and that the company "exercises decisive influence over the conditions under which the drivers provide their service".

The ruling comes three years after Spanish taxi drivers went to court in Barcelona, which consequently asked the opinion of the EU's highest court.

Already in May, one of the court's top legal advisers said that Uber was a transport company. The opinion was a normal step in the legal procedure, and the full court often takes the advice of this advocate general.

"This ruling will not change things in most EU countries where we already operate under transportation law," an Uber spokeswoman told EUobserver in a written statement.

"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," she added.

Dara Khosrowshahi took over as chief executive officer (CEO) of Uber in August this year, after the resignation of the controversial Travis Kalanick.

The International Road Transport Union welcomed the ruling, saying it was in line with its position "that providers of same transport service should be subject to the same rules".

"The decision is expected to have an impact on a range of platform companies in the transport sector in Europe and beyond," the group said in a statement.

The European transport workers federation was also pleased with the outcome.

"This is great news for customers and workers," it said in a statement. "Yes to innovation. No to social dumping," it said.

But another industry lobby group, the Computer & Communications Industry Association, expressed its disappointment with the ruling.

"After today's judgment innovators will increasingly be subject to divergent national and sectoral rules. This is a blow to the EU's ambition of building an integrated digital single market."

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