Uber is a taxi service, European court says

21 December, 2017, 01:15 | Author: Manuel Hopkins
  • Uber had fought taxi associations for years on the ruling | Carl Court  Getty Images

The European Court of Justice ruled Wednesday that ride-hailing company Uber should be regulated like a taxi service instead of a technology firm, a decision that limits its business operations in Europe.

In 2014 a taxi company in Barcelona asked a court to impose penalties on Uber for engaging in unfair competition, claiming that its low-priced UberPop service in particular allowed non-licensed drivers to pick up passengers through the app and it was damaging their service. The drivers maintained that Uber drivers should be subject to authorizations and license requirements and accused the company of engaging in unfair competition.

The decision by the European Court of Justice on Wednesday found that Uber operates more like a transportation service than an online platform that matches passengers with drivers.

The company had previously declared an ECJ ruling against it would make little difference to the way it operated in the European countries where it adheres to national regulations. The decision in Luxembourg, after a challenge brought by taxi drivers in Barcelona, will apply across the whole of the EU.

Uber is playing down the European Union court ruling saying it should be regulated like a taxi company, and says it will continue to find ways to operate in Europe.

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Uber is facing more regulatory hurdles in Europe.

Uber has reiterated that this decision isn't likely to change the way it operates in a number of European Union countries, since it's already been following local licensing regulations in a number of places.

In a dense legal judgement, the ECJ said that Uber was a service that connects "by means of a smartphone application and for remuneration non-professional drivers using their own vehicle with persons who wish to make urban journeys". It is likely to restrict the company from expanding services that allowed non-professional drivers to offer rides to clients. It said the ruling "confirms that Uber does not simply exist "on the cloud" but is well established with its wheels firmly on the road". The ruling could also affect other companies that are making similar claims of being only an intermediary service and not an active participant in the industry they're trying to disrupt.

However, a group representing online companies warned that the ruling goes against EU efforts to encourage innovation and help European entrepreneurs compete with US and Asian rivals.

Uber has had a roller-coaster year that also included the ouster of its CEO, sexual harassment allegations and the revelation that it covered up a massive breach of customers' data. The 28 member countries in the European bloc will have to regulate "the conditions under which such services are to be provided", the court added.

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