Home >Companies >Uber faces big European Union court decision

Luxembourg: The EU’s top court will decide Wednesday if ride-hailing app Uber is an ordinary taxi company and should be regulated as such, in a decision that will be closely watched around the world. The case is yet another thorn in the side for scandal-rocked Uber, which has drawn the fury of local taxi drivers and officials for flouting local regulations.

It also comes the same week as one of its drivers admitted to the attempted rape and murder of a British embassy worker coming home from a night out in Beirut, Lebanon.

Uber, the biggest name in the exploding gig economy, claims it is a mere service provider, connecting consumers with drivers in more than 600 cities. But it has run into huge opposition from taxi companies and other competitors who say this allows it to dodge costly regulations such as training and licensing requirements for drivers and vehicles.

The case was brought by a taxi drivers’ association in the Spanish city of Barcelona, where belief runs high that Uber is a taxi company that should be subject to rules governing such vehicles.

The court’s senior advisor, advocate general Maciej Szpunar agreed in an opinion in May arguing that Uber “whilst innovative, falls within the field of transport". “Uber can thus be required to obtain the necessary licences and authorisations under national law," he said.

The company reacted sharply, saying the opinion would change little in practice and only harm innovation. “To be considered a transport company will not change the regulations we are subject to in most European countries," a spokesman for Uber said. “It will however hurt the necessary reform of outdated laws which prevent millions of Europeans being able to find a reliable ride with just one click," the spokesman said.

The opinions given by the ECJ’s advocate generals—its top lawyers—are often followed by the court’s judges.

Uber has had a rough ride in Spain, where a judge ruled in 2014 that its UberPop service risked breaking the law, leading to the Barcelona submission to the ECJ.

Early last year it decided to only operate a limited a version of its UberX service in Spain which uses licensed, professional drivers instead of the amateurs who had previously worked via the UberPop application.

Uber has already had problems with the law in several European countries, particularly France where the company was forced to overhaul its business model.

In November a labour court in London, where the company is threatened with losing its license, said it had to pay the drivers a minimum wage and give them paid leave.

Uber does not employ drivers or own vehicles, but instead relies on private contractors with their own cars, allowing them to run their own businesses. Licensed taxi drivers meanwhile often have to undergo hundreds of hours of training, and they accuse Uber of endangering their jobs by using more affordable drivers who need only a GPS to get around.

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