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Uber should be treated as a transport company, EU advisor says

Uber should be treated as a transport company, EU advisor says


Non-binding opinion could spell trouble for Uber’s future in Europe

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An advisor to Europe’s highest court has said that Uber should be regulated as a transportation company, in a case that could determine the ride-hailing company’s future in the European Union.

In a opinion handed down Thursday, Maciej Szpunar, the advocate general of the European Court of Justice (ECJ), said that Uber “cannot be regarded as a mere intermediary between drivers and passengers,” and that it should therefore “be required to obtain the necessary licenses and authorizations under national law.” The decision handed down today is non-binding, though ECJ rulings have historically followed the advice of the advocate general. A final ruling is expected later this year.

A potentially major blow to Uber’s future in Europe

The case centers on whether regulators should treat Uber and other ride-hailing services as transport companies or digital platforms. If the court determines Uber is a transportation service, as taxi unions claim, it would be subject to the strict labor and safety regulations that other taxi associations face. If it decides that Uber is an “information society service,” as the company argues, it would be able to continue offering low-cost services.

In the opinion handed down Thursday, Szpunar said that Uber cannot be considered a digital platform because supplying transportation is the company’s “main component” of economic activity, “whilst the service of connecting passengers and drivers with one another by means of the smartphone application is a secondary component,” according to a press release from the ECJ. Szpunar added that Uber drivers “do not pursue an autonomous activity that is independent of” the company’s platform, and that “Uber controls the economically important aspects of the urban transport service offered through its platform,” the press release states.

The case was referred to the ECJ in 2015 by a judge in Barcelona. A lawsuit filed by a Spanish taxi association in 2014 alleged that Uber engaged in unfair competitive practices. The company later suspended its services in Spain, but returned to the country in 2016 after agreeing to hire licensed taxi drivers. Its low-cost UberPop offering previously connected users with non-professional drivers.

Uber has faced regulatory hurdles in several European countries since expanding to the continent in 2011. The company has faced lawsuits and bans in France, the Netherlands, Italy, and Germany, and two senior executives in France were charged in 2015 for operating an illegal taxi service.

“We have seen today’s statement and await the final ruling later this year,” an Uber spokesman said in a statement. “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.”

Update May 11th, 6:07AM ET: Added statement from Uber spokesperson.