European Court of Justice rules Uber is a transport service provider

Although the landmark ruling will not have an immediate impact on the rider hailing service provider, since it already operates under transportation law, it will nevertheless have a material impact on the company’s finances and its operations.

On Wednesday, in a landmark ruling by EU’s top court, ride-hailing tech service provider Uber has been determined to be a transport service provider and not just an intermediary between drivers and customers looking for a ride.

The ruling will have a significant impact on how Uber will operate in the European Union.

“The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,” said the European Court of Justice (ECJ). “Member states can, therefore, regulate the conditions for providing that service”.

Earlier, Uber had clashed with local and national regulators in various countries arguing that it was only a go between and not a transport service provider, thus a different, lighter set of rules will be applicable to it.

The case comes in the backdrop of a complaint filed Barcelona’s professional taxi drivers’ association who stated that Uber’s activities in Spain amounted to misleading practices and unfair competition since Uber uses non-professional drivers for its UberPOP service.

In its ruling, the ECJ stated Uber “exercises decisive influence over the conditions under which the drivers provide their service” and that without the Uber mobile app “persons who wish to make an urban journey would not use the services provided by those drivers.”

Incidentally, the landmark ruling is unlikely to have an immediate impact on Uber’s European operations where it already operates under local transportation laws and has cut back its usage of unlicensed services such as UberPOP.

“This ruling will not change things in most EU countries where we already operate under transportation law,” said Uber’s spokeswoman in a statement.

“As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe. This is the approach we’ll take to ensure everyone can get a reliable ride at the tap of a button.”

Uber is currently in the middle of a legal battle after its license to operate has been canceled in London, an important European market.

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Categories: Creativity, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy, Sustainability

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