The European Court of Justice (ECJ) has ruled that the services provided by Uber are ‘services in the field of transport’ within the meaning of EU law, rather than ‘information society services’, and that accordingly it is for Member States to determine how to regulate the conditions under which it provides its services.
Uber provides a service connecting customers via a smartphone app to non-professional drivers who provide car rides in their own vehicles. In 2014 an association of professional taxi drivers in Barcelona brought an action before a Barcelona Commercial Court seeking a declaration that Uber’s activities in the city amounted to unfair practices in violation of Spanish competition law, in that Uber and its drivers operated as a taxi service without the licences and authorisations that Barcelona transport law requires.
To decide the case the Barcelona court had to refer to the ECJ the question of whether the services provided by Uber should be regarded as transport services, information society services or a combination of both. If Uber’s services were wholly information society services then they would be protected by the Directive on Services in the Internal Market and the Directive on Electronic Commerce, and its activities could not be regarded as unfair practices.
The ECJ considered Uber’s role to be “more than an intermediation service consisting of connecting, by means of a smartphone application, a non-professional driver using his or her own vehicle with a person who wishes to make an urban journey.” The ECJ ruled that:
In a situation… where passengers are transported by non-professional drivers using their own vehicle, the provider of that intermediation service simultaneously offers urban transport services, which it renders accessible, in particular, through software tools such as the application at issue in the main proceedings and whose general operation it organises for the benefit of persons who wish to accept that offer in order to make an urban journey.
Accordingly the intermediation service “form an integral part of an overall service whose main component is a transport service.” The ECJ also found that Uber exercised “decisive influence over the conditions under which the service is provided by drivers.” Accordingly the ECJ found that Uber’s activities should be classified as “a service in the field of transport”.
The decision is expected to have far-reaching consequences for many businesses that would have previously been classified as technology companies. For Uber the decision means that Member State courts will likely be more inclined to regard its drivers as conventional workers, rather than upholding the arms-length relationship it currently maintains with its drivers.
Contributed by: John Magee
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