Uber suffered a setback on Thursday with an advisor to Europe’s top court stating that the ride-hailing app is providing transportation services, and not merely connecting drivers to passengers via technology which the U.S. firm which has previously argued.
“The Uber electronic platform, whilst innovative, falls within the field of transport: Uber can thus be required to obtain the necessary licences and authorizations under national law,” the European Court of Justice (ECJ) said in a statement.
It is a non-binding opinion but the judges in the court tend to follow the advisory.
In 2014, a group called Elite Taxi in Barcelona asked a court in the city to impose penalties on Uber’s operations in the country. The association claimed that Uber was engaging in unfair competition towards Elite Taxi’s drivers, particularly with its UberPop service, which allowed non-licensed drivers to pick up passengers via the app.
Uber suffered a setback Thursday with an advisor to Europe’s top court stating that the ride-hailing app is providing transportation services, and not merely connecting drivers to passengers via technology which the U.S. firm which has previously argued.
“The Uber electronic platform, whilst innovative, falls within the field of transport: Uber can thus be required to obtain the necessary licences and authorizations under national law,” the European Court of Justice (ECJ) said in a statement.
It is a non-binding opinion but the judges in the court tend to follow the advisory.
In 2014, a group called Elite Taxi in Barcelona asked a court in the city to impose penalties on Uber’s operations in the country. The association claimed that Uber was engaging in unfair competition towards Elite Taxi’s drivers, particularly with its UberPop service, which allowed non-licensed drivers to pick up passengers via the app.
“It is undoubtedly transport (namely the service not provided by electronic means) which is the main supply and which gives the service meaning in economic terms,” the ECJ added.
It is now up to the court in Barcelona to decide what to do with Uber later this year. It could mean that the company would need to get additional licenses. But Uber said it’s unlikely to change the way it operates in the EU.
“We have seen today’s statement and await the final ruling later this year. Being considered a transportation company would not change the way we are regulated in most EU countries as that is already the situation today,” a spokesperson for the company said in an emailed statement to CNBC on Thursday.
“It will, however, undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button.”
Uber’s Europe woes
Uber launched in Europe five years ago and has since had a number of clashes with regulators as well as traditional taxi companies which have protested against the U.S. firm, which is worth around $66 billion.
In London, U.K., for example, Uber lost an appeal to a court which said that drivers on the platform must pass a strict English language test. In Italy, a court in Rome decided to suspend the app, but this injunction has been halted for now by a higher court. And in Denmark, Uber said in March it would shut down its operations in the country thanks to new rules.
The company has made strides to work with regulators however. It is still operating in most EU countries and last year relaunched UberX in both Berlin and Madrid after being banned in the country, after it complied with local laws.
Source: CNBC
