Business

Sunday 18 November 2018

EU rules Uber is a transport firm

Court defeat for tech giant
Court defeat for tech giant

Stephanie Bodoni and Adam Satariano

CAB hailing service Uber Technologies has suffered a significant defeat after the European Union's top court ruled its service should be regulated as a transport company.

The decision could have far-reaching implications for the so-called gig economy that involves technology firms matching customers to often self-employed service providers.

The EU Court of Justice said yesterday that the world's most valuable startup should be regulated as a transport service even when drivers aren't professionals and using their own vehicles.

The company says most of its products are already covered by such regulations. The decision, which can't be appealed, clarifies for the first time that connecting people via an application to non-professional drivers forms an integral part of a transport service.

It rejects Uber's view that such services are purely digital.

In the EU judges' view, "the most important part of Uber's business is the supply of transport - connecting passengers to drivers by their smartphones is secondary," said Rachel Farr, senior employment lawyer at law firm Taylor Wessing.

"Without transport services, the business wouldn't exist."

Uber has argued that it's a technology platform connecting passengers with independent drivers, not a transportation company subject to the same rules as taxi services.

The case has been closely watched by the technology industry because of its precedent for how firms in the gig economy ought to be regulated across the 28-nation bloc. While the ruling is valid EU-wide, it remains limited to Uber's actual services.

"This ruling will not change things in most EU countries where we already operate under transportation law," Uber said in a statement.

"However, millions of Europeans are still prevented from using apps like ours."

Yesterday's case centred around UberPop, a service in several European cities that allowed drivers without a taxi licence to use their own cars to pick up passengers.

Legal challenges have forced Uber to halt UberPop in most major European countries in favour of UberX, which requires a licence. (Bloomberg)

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