21 Dec 17

European Court rules Uber is a transport company, not a software company

Uber is officially a transport company and not a digital service provider, the European Court of Justice has ruled.

The case was brought before the court by taxi drivers in Barcelona. It will apply across the whole European Union and it cannot be appealed.

This ruling means Uber will have to conform to stricter rules regarding transport companies - a sector expressly excluded from EU rules on the freedom to provide services. Local governments are therefore free to introduce their own regulations.

In its ruling, the ECJ stated: "The service provided by Uber is more than an intermediation service consisting of connecting, by means of a smartphone application, a nonprofessional driver using his or her vehicle with a person who wishes to make an urban journey. In this situation, the provider of that intermediation service simultaneously offers urban transport services."

The court added: "The Court notes in that regard that the application provided by Uber is indispensable for both the drivers and the persons who wish to make an urban journey. It also points out that Uber exercises decisive influence over the conditions under which the drivers provide their service. Therefore, the Court finds that that intermediation service must be regarded as forming an integral part of an overall service whose main component is a transport service and, accordingly, must be classified not as ‘an information society service’ but as ‘a service in the field of transport’."

An Uber spokesperson reacted: "This ruling will not change things in most EU countries where we already operate under transportation law."

Uber's legal battles

In the meantime, London Mayor Sadiq Khan announced last November that Uber's appeal against a decision by Transport for London refusing to renew Uber's licence could take up to five years. Its licence expired in October but the company can continue to operate while the appeal process is ongoing.

In Bulgaria, Uber has had to suspend its services after accusations of unfair trade practices.

In Denmark, taxi meters are mandatory for taxi drivers, forcing Uber to pull out of the country earlier in 2017.

In Italy, Uber is expected to be banned completely. It is allowed to continue its operations until a final ruling is made. This ruling is likely to confirm an earlier ruling whereby Uber was found to constitute unfair competition.

Following a similar legal battle in Hungary, the ride-hailing firm has had to suspend its service in the country.

In Finland, Uber drivers are at risk of prosecution over taxi permit regulations.

Uber has faced similar criticism and occasional bans in various other countries and cities across the world, including in its home country of the United States.

Authored by: Benjamin Uyttebroeck