The European Union’s top court ruled that Uber must be designated as a transportation service. This new designation will require the rideshare company to have to face considerably stricter regulations.
Uber Drivers Regulated Like Taxi Drivers
The court’s ruling means that Uber will be required to comply with a long string of tougher regulations which already apply to conventional taxi companies. Uber’s main argument had been that it was a technology platform, not a transportation service. It stated that its function was to connect independent drivers with passengers seeking a ride.
The court disagreed in this landmark ruling. Moving forward, Uber will need to treat its drivers as though they were closer to employees than customers using their technology service. As the ruling was laid down by the top court, it can no longer be appealed.
Uber’s Rules Depend on the Country
Now that the E.U. Court of Justice (ECJ) has made its ruling, it’s up to each of the 28 member states to come up with their interpretation of it by issuing the regulations that will govern ridesharing companies like Uber.
“The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,” said the ruling. The member states “can therefore regulate the conditions for providing that service.”
The ECJ confirmed its decision in a tweet that read “#ECJ rules Uber is a transport service and so can be regulated as such at national level.” — EU Court of Justice (@EUCourtPress) December 20, 2017
Not Uber’s First European Struggle
Uber has already been pushed to give up its UberPop service within several major European markets. Instead, it operates UberX, which functions through the use of drivers with professional licenses.
“This ruling will not change things in most EU countries where we already operate under transportation law,” said a spokesperson for Uber in response to the ECJ’s recent decision.
The case itself was one that brought together disputes that have occurred over the past five years between Uber and a spectrum of different European taxi associations. The taxi companies insisted that Uber was undercutting their own businesses and that the ridesharing service should be governed by the same regulations that taxi associations and drivers face. The issue has previously escalated into violent protests.
The new ECJ ruling will also set a precedent that can impact companies in the E.U. that operate through similar models, such as Deliveroo and Foodora.
The European Commission has already stated that it was seeking to create a sharing economy regulatory framework. World Bank data suggests that E.U. workers in shared economy jobs earn an average of 14 percent less than more traditionally employed individuals hired on an open-ended contract.