European Union court rules Uber a transport service
21 December, 2017, 01:16 | Author: Gladys Mathis
The decision was handed down in response to a complaint from a Barcelona taxi drivers association, which tried to prevent Uber from expanding into the Spanish city. "Where strict regulations like this protect the interests of a very small group of taxi drivers, they significantly restrict free competition and options for customers", Villig said in a press release.
Although the ECJ agreed Uber's mobile app had revolutionised the taxi industry, it argued this was intrinsically linked with the transportation service it supplies to customers.
The landmark ruling from the European Court of Justice (ECJ) states that Uber will have to obey by the same regulations as taxi companies.
The decision affects ride-hailing services around the 28-nation European Union, where national governments can now regulate services like Uber as transport companies.
The EU court's senior adviser had said in a legal opinion in May that Uber was indeed a transport company.
EU law protects online services from undue restrictions and national governments must notify the European Commission of any measures regulating them so it can ensure they are not discriminatory or disproportionate. "It also points out that Uber exercises decisive influence over the conditions under which the drivers provide their service".
Uber is facing more regulatory hurdles in Europe.
"Uber's activity must be viewed as a whole encompassing both the service of connecting passengers and drivers with one another by means of the smartphone application and the supply of transport itself, which constitutes, from an economic perspective, the main component", the ruling explained.
This ruling will not change things in most European Union countries where we already operate under transportation law.
The decision by the Luxembourg-based European Court of Justice in theory applies to ride-hailing services around the 28-nation EU.
In France, Uber's low-priced service involving independent, unregulated drivers is already banned as the result of legal challenges, but Uber operates a popular ride service involving licensed drivers that competes with traditional taxis and charges similar but more flexible rates.
But Mike Ramsey, analyst at research firm Gartner, called Wednesday's ruling a "giant blow to Uber's business model".
However, an association representing online companies warned that the ruling goes against EU efforts to encourage innovation and help European entrepreneurs compete with US and Asian rivals.
In the U.S., Uber and competitors such as Lyft are governed by a patchwork of state and city regulations.
The ruling went on to say that Uber's "approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential safety and security implications".
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