Uber has hit a roadblock in the court case that will decide its fate across Europe
A key advisor to the European Court of Justice said the firm should be treated as a transport company.
UBER’S PLANS FOR Ireland and other European states where it faces opposition have been dealt a blow, with the EU’s top court poised to rule against the billion-dollar ridesharing company.
An opinion from the European Court of Justice (ECJ)’s advocate-general, Maciej Szpunar, today declared that Uber should be dealt with as a transportation company – rather than a mere intermediary.
The finding, if upheld by the court, would mean that the firm can’t skirt any local laws that govern transport services, like the need for drivers to operate licensed taxis in order to collect fares.
Although the decision is non-binding, opinions cast by advocate-generals tend to be followed closely in the ECJ’s final rulings.
Szpunar said that his decision is based on the fact that the supply of transport is “the main component” of Uber, while connecting passengers and drivers – the service element – is secondary.
Judges at the European court are currently deciding whether Uber should be classed as a digital service or transport firm following action brought against the ridesharing company by a Barcelona-based taxi association.
In response to the opinion, an Uber spokesperson said the company will await the final ruling.
“Being considered a transportation company would not change the way we are regulated in most EU countries as that is already the situation today,” the company said.
“It will, however, undermine the much-needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button.”
A protest against Uber in Brazil
Background
This case in front of the ECJ was kicked off in 2014 by Barcelona-based taxi group Asociación Profesional Elite Taxi.
When Uber attempted to launch in Barcelona, the association went before a commercial court and asked it to impose sanctions on the US company for engaging in what the taxi group deemed unfair competition.
The case was referred to the ECJ after the Barcelona court said it was unsure about how its laws should be interpreted.
Either way, the final ruling of the case will have major implications for Uber’s business model in Europe.
If Uber is ruled an IT service it could begin to circumvent national taxi regulations which are holding back the launch of its core ride-sharing services. However, if it is declared a transport service, the company could be regulated like any other operator.
Last year, the Irish government said it would join the ECJ hearing and argue that Uber’s business model should be classified as a transport service. At the time, a spokesman for the Department of Transport told Fora:
“Ireland’s position is that the ability of member states to regulate the services concerned must be maintained with a view to protecting the public interest and ensuring public safety and consumer protection.”
In the Republic, Uber is treated like a dispatch operator and only a licensed driver using a licensed vehicle can take bookings using the app.
This means its service is essentially the same to other providers like MyTaxi – formerly Hailo – and users can only book taxis or chauffeur-driven cars.
Uber has lobbied both the Irish government and the National Transport Authority in a bid for those laws to be changed.
Michael Noonan and Uber Ireland head Kieran Harte
Growing fast
Uber has been one of the fastest growing companies to come out of Silicon Valley in recent years.
Since it was founded in 2009 it has raised almost $13 billion, with $3.5 billion of that coming from Saudi Arabia’s sovereign wealth pool last year.
Over its lifespan, the company has faced numerous lawsuits worldwide. It is currently weathering another storm in the US following legal action from Waymo, Google’s self-driving car division, which has accused Uber of stealing its tech.
Last year, the company opened its Limerick base and revealed plans to hire 300 people to work at the office which will fulfill customer-support services for cities across Europe, the Middle East and Africa.
Additional reporting from Business Insider.
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