European court ruling may hinder Uber's appeal against drivers' employment status

The EU's top court has decided Uber is a taxi company after all

The EU's top court has decided Uber is a taxi company after all

This ruling sets out clearly that Uber is, in legal terms at least, a transport company.

The court case originates from legal action filed by Elite Taxi, a Barcelona-based association of independent taxi drivers, which is seeking penalties against Uber for operating its low-priced Uberpop service without the necessary taxi licenses and authorisation from the city.

Uber has been ruled a transport service in Europe. Traditional taxi firms, whose drivers have protested in dozens of cities, have welcomed the ruling.

Uber also says that there are millions of Europeans who are not allowed to use its app and that the company is open to regulations.

Instead, it's an app that acts an intermediary between drivers and customers looking for rides.

The judgment by the European Court of Justice is a blow to Uber's efforts to use courts to lighten its regulatory load and forces it to deal more directly with national and local governments that set rules governing auto and transport services in Europe, according to a report from Dow Jones Newswires supplied to Efe.

The decision stands to increase legal risks for other "gig-economy" companies - including Airbnb - a growing part of the workforce, in which people operate as freelancers or on short-term contracts as opposed to holding permanent jobs.

The verdict comes after Uber was told last month that the appeal to renew its licence in London could take years, according to Mayor Sadiq Khan.

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Uber can be regulated as a taxi service and not as a digital app following a European Court of Justice decision. "As our new CEO has said, it is appropriate to regulate services such as Uber, and so we will continue the dialogue with cities across Europe". With this classification, Uber argued that it should fall under online services, which enjoy lighter European Union regulations.

Prof Andre Spicer, from the Cass Business School, welcomed the ruling.

However, an association representing online companies warned that the ruling goes against EU efforts to encourage innovation and help European entrepreneurs compete with USA and Asian rivals.

"The goal of those rules is to make sure online innovators can achieve greater scalability and competitiveness in the European Union, unfettered from undue national restrictions", Jakob Kucharczyk, vice president for European Union policy at the Computer and Communications Industry Association, told Reuters. He said it is too early to say which other companies might be affected but called the overall message from the ruling worrying for startups.

The ECJ's ruling gave additional credence to such decisions, posing a real threat to Uber's future growth plans.

"There has also been a benefit in incumbent London taxi cabs, which are now taking credit cards, which they resisted for years". Generally, Uber has been successful in getting its way, leveraging its popularity to lobby governments.

And it's likely that member states will act accordingly.

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