Uber can be regulated as a taxi service and not as a digital app following a European Court of Justice decision. Traditional taxi firms, whose drivers have protested in dozens of cities, have welcomed the ruling.
The European Union’s top court ruled on Wednesday that EU member states can regulate the ride-hailing app Uber like a normal taxi company, after judges decreed the US-headquartered firm cannot claim to be merely a provider of digital services.
“The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,” the European Court of Justice said.
The Luxembourg-based court was ruling on a case brought by a Spanish taxi drivers’ association which complained that Uber is able to circumvent expensive licensing requirements imposed on traditional taxi services by local authorities.
The association, based in Barcelona, sought to prevent Uber from setting up in the city.
In response to Wednesday’s ruling, one Barcelona-based taxi firm, Elite Taxi BCN, tweeted: “Today is a great day, we trust in justice to declare Uber a transport company.”
Drivers signed up to the ride-hailing app could now be forced to obtain similar licenses and authorizations to carry passengers.
New thorn in Uber’s side
Uber claims it is a mere service provider, connecting consumers with drivers in more than 600 cities. It argued that it should be regulated under the EU’s digital services laws.
The ruling is yet another setback for the biggest name in the sharing economy, whose entry into many markets has led to angry protests and strike action from licensed taxi drivers.
But Uber downplayed the impact of Wednesday’s decision, saying that it will continue to find was to operate in Europe.
The decision “will not change things in most EU countries where we already operate under transportation law,” the San Francisco-based company said in a statement. Uber will “continue the dialogue with cities across Europe” to allow access to its services.
In 2014, a Spanish judge ruled that the “Uberpop” service risked breaking the law which led Uber to offer a limited version of its “Uber X” service across the country, which uses licensed professional drivers, rather than amateurs.
Uberpop is banned in Germany and the firm has been forced to redesign its business model in France. Last month, a labor court in London ruled that the ride-hailing app’s drivers were employees, rather than self-employed, and ordered the firm to pay them the minimum wage and paid leave.
Uber is also facing the possible permanent loss of its license to operate in London, after transport regulators ruled that the service wasn’t “fit and proper.”