EU defines Uber as taxi firm
The ruling could have wide-ranging implications for how Uber, and other tech firms, can operate across the EU.
It could hamper Uber’s expansion plans in the region by making it pay costly licensing fees and employee benefits.
Uber called itself an “information society service” that just connected drivers with passengers through a mobile application.
The European Court of Justice in Luxembourg has rejected the company’s claim.
Uber will have to start treating drivers more like taxi drivers, rather than independent workers with no link to the firm aside from an app.
The court said Uber, whose purpose was “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”, should be classified as a transport service.
The ruling is likely to disturb the poorly regulated world of the “gig economy”, a growing part of the work force in which people operate as freelancers or on short-term contracts as opposed to holding permanent jobs.
“As EU law currently stands, it is for the member states to regulate the conditions under which such services are to be provided in conformity with the general rules of the treaty on the functioning of the EU,” the court said.
Uber cannot appeal against the ruling and means it faces tougher regulation in the EU.
The US firm has angered taxi operators and regulators, many of whom say that it has been allowed to operate with insufficient oversight.
EU members are now free to impose restrictions or conditions on Uber as they would with other mini-cab firm.
Before the ruling, an Uber statement said: “Any ruling will not change things in most EU countries, where we already operate under transportation law.
“However, 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.
“We want to partner with cities to ensure everyone can get a reliable ride at the tap of a button.”
A Spanish taxi drivers’ association brought the case, arguing that Uber was a taxi firm and should be subject to the same rules as other, more traditional companies.
A protest against Uber in Budapest last year. Picture credit: Wikimedia