ECJ rules Uber can be regulated as taxi company

Uber faces tougher regulation across Europe after the EU’s highest court ruled that the US ride-hailing app should be treated as a traditional transport company.

In a long-awaited judgment, the European Court of Justice said on Wednesday that Uber operated in the EU as a taxi business, shifting its legal status from a digital company and opening it up to escalating regulation across the bloc’s 28 member states.

The final ruling from the Luxembourg judges, which cannot be appealed, found that despite its use of technology, Uber was “more than an intermediation service” for people trying to hail a cab.

The ruling paves the way for EU governments to regulate Uber as any other minicab or taxi business in Europe, exempting it from looser rules that govern the digital single market.

The judges said Uber “must be classified as a ‘service in the field of transport’ within the meaning of EU law. Member states can therefore regulate the conditions for providing that service.”

Uber had argued its business, which connects drivers and customers through an app, should be classified as an “information society service” rather than a traditional taxi operation.

The court found that Uber as a travel company was “indispensable for both the drivers and the persons who wish to make an urban journey”. The company “exercises decisive influence over the conditions under which the drivers provide their service”, said the judges.

Uber played down the implications of the judgment, which looked at its UberPOP peer-to-peer taxi service that connects drivers without commercial car licences to riders.

The service, which was originally challenged by the Asociacion Profesional Elite Taxi, a cabbies’ group in Barcelona, operates only in Poland, the Czech Republic, Slovakia and Romania.

The US company has since relaunched the peer-to-peer system as a regulated taxi and private hire business in other European cities including Madrid and Berlin. The company also already operates under national transport laws in some of its biggest markets such as France, the UK and Germany.

Uber said: “This 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.

“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.”

The ruling comes after Uber faced a backlash from regulators in some of its biggest European markets. In London, Uber’s licence renewal was rejected in September over safety concerns. The company also faces a court ruling in France, where it is accused of running an illegal taxi service when UberPOP operated in the country.

The ECJ’s decision will have broader significance for how technology companies that offer traditional peer-to-peer services should be regulated in the EU. With Uber now not classified as a digital company, EU governments will no longer have to prove to the European Commission that any restrictions on its business have to be “reasonable” and “proportionate” as stated by digital single market rules.

“After today’s judgment innovators will increasingly be subject to divergent national and sectoral rules,” said Jakob Kucharczyk of the Computer & Communications Industry Association in Brussels.

Mehreen Khan in  Brussels and  Aliya Ram in London