Uber must be regulated by member states, ECJ rules
The European Court of Justice has ruled that electronic platform Uber, which connects drivers with potential passengers, is a transport service.
On Wednesday 20 December, the ECJ published the ruling on the case of the Asociación Profesional Elite Taxi v Uber Systems Spain SL. The ruling establishes that it is a transport service and that “it is for the member states to regulate the conditions under which such services are to be provided in conformity with the general rules of the Treaty on the Functioning of the EU.”
The judgment is a blow to Uber’s plans to expand across European countries, as it will not be able to expand peer-to-peer services that allow anyone with a car to use the company to collect passengers.
In 2014, a professional taxi drivers’ association in Barcelona brought an action before the commercial court seeking a declaration that the activities of Uber Systems Spain, a company related to Uber Technologies (together ‘Uber’), amounted to misleading practices and acts of unfair competition. Indeed, neither Uber Systems Spain, nor the non-professional drivers of the vehicles concerned, have the licences and authorisations required under the Regulation on taxi services in the metropolitan area of Barcelona.
“In today’s judgment, the Court declares that an intermediation service such as that of Uber, the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of EU law. Consequently, such a service must be excluded from the scope of the freedom to provide services in general as well as the directive on services in the internal market and the directive on electronic commerce.”
“It follows that, as EU law currently stands, it is for the member states to regulate the conditions under which such services are to be provided in conformity with the general rules of the Treaty on the Functioning of the EU.”
The press release points out that “Uber exercises decisive influence over the conditions under which the drivers provide their service.”
The directive on electronic commerce does not apply to that service, and it is also excluded from the scope of the directive on services in the internal market. “For the same reason, the service in question is covered not by the freedom to provide services in general but by the common transport policy,” the press release states.
“In a statement, Uber said the European court’s ruling would not alter how it now operates in most European countries where it already complies with existing transport rules. The ruling also comes soon after the company was stripped of its licence to operate in London and saw Travis Kalanick, its founder, resign amid an ongoing boardroom stand-off. Dara Khosrowshahi, its new chief executive, also faces difficulties in changing the internal culture at the company, which is now worth an estimated $70 billion.”