12 May 2017

Uber faces setback in European market

7:04 am on 12 May 2017

The European Union's top court has been advised to rule that the US ride-hailing firm is actually a transport service not an app, with a final ruling to be made in the coming months.

Uber's self-driving cars

An association of taxi drivers from Barcelona say Uber is competing unfairly in the city by using unlicensed drivers for its service. Photo: AFP

Uber is a transport firm that requires a licence to operate, a senior member of European Union's top court has said.

The decision is a set-back for Uber, which had argued it only provided technology to help drivers find passengers.

If the ruling is enforced across Europe, it might mean Uber has to operate under the same conditions and safety rules as established taxi firms.

Uber said the decision did little to change the way it was regulated.

Reform needed

Maciej Szpunar, advocate general at the Court of Justice of the European Union, made the decision while considering a case brought by an association of taxi drivers from Barcelona.

They said Uber was competing unfairly in the city by using unlicensed drivers for its service.

Mr Szpunar said that although Uber was "innovative", the way it operated still fell within the realm of transport rather than information services.

Uber was not merely a middleman, he said, but was essential to the way the ride-sharing system worked.

"Uber can thus be required to obtain the necessary licences and authorisations under national law," said Mr Szpunar.

The decision is not binding, but in the past judges ruling on cases before the court have generally followed the advocate's lead.

For Uber, the decision might mean it has to take more care of its drivers and ensure they are properly trained.

The decision could also have implications for other tech companies, such as Airbnb and Deliveroo, that maintain a "hands-off" relationship with people who provide their services.

In response, Uber said it was already regulated as a transport operator in many European countries so the ruling would have little impact.

But it added that if the court backed the ruling it would "undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button".


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