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Europe\u2019s top court appears to be leaning towards calling a spade a spade by\u00a0judging Uber\u2019s business a transportation company, rather than just\u00a0an enabling tech platform as the company prefers to think of\u00a0itself, ie. as a way for the on-demand ride hailing app\u00a0to work around the (stricter) licensing regulations that can be applied to\u00a0traditional taxi firms.<\/p>\n
But how much longer Uber\u2019s\u00a0regulatory bypass\u00a0strategy will wash in the European Union remains to be seen.<\/p>\n
The bloc\u2019s top court, the ECJ, is due to make a ruling on the\u00a0classification of Uber\u2019s\u00a0business \u2014 in a case pertaining to how EU law applies to Uber\u2019s\u00a0regional operations \u2014 later this year.<\/p>\n
And now today an influential advisor to the court, Advocate General Maciej Szpunar, has published his\u00a0opinion<\/a>\u00a0on the case. And that opinion is not\u00a0looking good for Uber.<\/p>\n Szpunar\u2019s assessment is that\u00a0Uber \u201cexerts control over all the relevant aspects of an urban transport service\u201d \u2014 from price, to minimum safety conditions, to accessibility of transport supply, to conduct of drivers and access to the service.<\/p>\n \u201cWhile this control is not exercised in the context of a traditional employer-employee relationship, one should not be fooled by appearances,\u201d the AG\u00a0writes.<\/p>\n \u201cIndirect control such as that exercised by Uber, based on financial incentives and decentralised passenger-led ratings, with a scale effect, makes it possible to manage in a way that is just as \u2014 if not more \u2014 effective than management based on formal orders given by an employer to his employees and direct control over the carrying out of such orders.\u201d<\/p>\n \u201cA genuine organizer and operator of urban transport services\u201d<\/strong><\/p>\n On the crucial classification of Uber\u2019s business, the AG\u2019s\u00a0conclusion\u00a0is that Uber\u2019s activity is to provide transportation services, rather than merely being an\u00a0intermediary platform.<\/p>\n He notes, for example, that the business \u201ccomprises a single supply of transport in a vehicle located and booked by means of the smartphone application and that this service is provided, from an economic standpoint, by Uber or on its behalf\u201d and that the service is \u201cpresented to users, and perceived by them, in that way\u201d, as well as asserting\u00a0that \u201cwhen users decide to use Uber\u2019s services, they are looking for a transport service offering certain functions and a particular standard of quality\u201d, and noting: \u201cSuch functions and transport quality are ensured by Uber.\u201d<\/p>\n His\u00a0conclusion is\u00a0that while Uber is using innovative\u00a0methods to deliver a\u00a0transportation service, the core service is still transportation.<\/p>\n \u201cUber is\u2026 not a mere intermediary between drivers willing to offer transport services occasionally and passengers in search of such services. On the contrary, Uber is a genuine organiser and operator of urban transport services in the cities where it has a presence. While it is true, as Uber states in its observations in the case, that its concept is innovative, that innovation nonetheless pertains to the field of urban transport,\u201d he writes.<\/p>\n While an AG\u2019s opinion is not binding on the court, it is highly influential and\u00a0the court\u00a0frequently\u00a0accords with it. So it looks as if the ECJ is leaning towards a determination that could\u00a0level the legal playing field between Uber and traditional taxi firms operating in the EU. And not in the way Uber would like.<\/p>\n An ECJ judgment that\u00a0Uber\u2019s business is to offer a \u201cservice in the field of transport\u201d would mean its\u00a0activity is not governed by the principle of the freedom to provide services in the context of \u2018information society services\u2019 under EU law \u2014 which in turn would mean Uber\u00a0is<\/em>\u00a0subject to the conditions under which non-resident carriers may operate transport services within EU Member States.<\/p>\n So, basically, Uber\u00a0would be bound by national regulations of Member States and could not legally claim a route to circumvent local transport rules. The company has\u00a0already pulled out of multiple\u00a0EU\u00a0markets where it deems regulations not to its taste\u00a0\u2014 most recently in Denmark<\/a>. So an\u00a0ECJ ruling that accords with the AG would likely cement those regional\u00a0retreats.<\/p>\n A\u00a0spokeswoman for the ECJ said\u00a0there is no date for the judgement on the case\u00a0yet but she told us\u00a0these usually follow between three and six months after the AG opinion has been delivered.<\/p>\n In certain\u00a0sections of his\u00a0opinion, Szpunar\u2019s view appears to echo a separate legal judgment against Uber by\u00a0a UK employment tribunal last year<\/a>, which also disagreed with the company\u2019s classification\u00a0of itself \u2014 describing Uber\u2019s\u00a0claim that it merely provides \u201cself-employed contractors\u201d\u00a0with \u201cbusiness opportunities\u201d as a \u201cpure fiction\u201d.<\/p>\n Although Szpunar also makes a\u00a0point of emphasizing that despite his assessment that Uber is acting as an employer in the manner in which\u00a0it uses technology to manage drivers and the quality of service, the issue\u00a0of whether all Uber drivers are then \u201cnecessarily\u201d employees is an entirely separate question \u2014 and one that is not part of the legal determination in the case before the ECJ.<\/p>\n The case before the ECJ now was originally filed in Spain in 2014, by an association of taxi\u00a0drivers in Barcelona angry at\u00a0Uber trying to circumvent licensing regulations (Uber\u2019s UberPop service, which lets any driver\u00a0offer ride-hailing services, remains\u00a0banned in the city). The court there\u00a0referred it up to the ECJ for a\u00a0determination on how to\u00a0interpret EU law.<\/p>\n Once the ECJ has\u00a0responded to the questions referred to it the Spanish court will decide the substantive case in that city. And while, at the local level, the case will only determine whether Uber needs to gain licenses and authorizations required by the city of Barcelona\u2019s regulations in order to operate in that city, it has much much greater legal significance with\u00a0regional implications for Uber\u2019s activities.<\/p>\n Given that the ECJ is Europe\u2019s top court there is\u00a0no onward appeal route for Uber to seek to escape its interpretation\u00a0\u2014 opening the company\u2019s\u00a0EU business to other\u00a0legal challenges on these grounds.<\/p>\n Responding to the AG\u2019s opinion today, an Uber spokesperson emailed us\u00a0the following statement:\u00a0\u201cWe have seen today\u2019s statement and await the final ruling later this year. Being considered a transportation company would not change the way we are regulated in most EU countries as that is already the situation today. It will, however, undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2016\/06\/uber-everywhere.png?w=680\")
Europe’s top court appears to be leaning towards calling a spade a spade by judging Uber’s business a transportation company, rather than just an enabling tech platform as the company prefers to think of itself, ie. as a way for the on-demand ride hailing app to work around the (stricter) licensing regulations that can be applied to traditional taxi firms. Read More<\/a><\/p>\n\n<\/img><\/a>
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