The European Court of Justice (ECJ) has determined Uber is officially a transport company, not a digital service. They recently ECJ ruled the ride-share app essentially counts as a taxi service despite Uber’s insistence that it is an information society service.
The case went to court after Uber was told it had to follow the same local rules as taxis in Barcelona. Uber tried to argue the company is actually a means of connecting people electronically, not a transportation service.
The ECJ was like, yeah so since you use vehicles, you’re in the transport business.
Officially, they stated that Uber is used “to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys.”
As a result, Uber is classified under EU law as “a service in the field of transport.” This means they’re subject to the same laws as other taxis.
A company spokesperson noted, “This ruling will not change things in most EU countries where we already operate under transportation law.”
While this is unlikely to immediately cause changes, this ruling could disrupt the gig economy in its current state. Companies that portray themselves an app connecting customers to providers, like courier services, may find their business models challenged.
In the U.S., companies like Uber fall under regulations for tech-based capitalism. The rise of gig services like Favor, Lyft, and Postmates offer freelancers opportunities to pick up jobs outside of the traditional 9-to-5 work schedule.
However, since the tech-driven gig economy is relatively new, some freelancers may find themselves shafted in terms of benefits and regulations. Prime example: Uber collectively owing its drivers millions for miscalculating commissions.
The EU’s ruling hopes to prevent this type of exploitative behavior and ensure drivers make fair wages. The ruling may also foster competition in the ride-hailing market since Uber will be subject to the same regulations as everyone else.
Uber’s spokesperson went on to point out, “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.”
Various American cities have gone to battle over regulating Uber – could Europe be starting a trend that American regulators may follow?