New Uber blow as European legal adviser says service should be licensed like taxis

Uber could be forced to adhere to local licensing laws in European cities, after a top legal adviser to Europe’s highest court said the US ride-hailing app should be regulated as a transport company.

The European court of justice’s advocate general Maciej Szpunar said Uber provides a transport service, rather than a digital service as it has argued.

He said in a statement: “The Uber electronic platform, whilst innovative, falls within the field of transport. Uber can thus be required to obtain the necessary licences and authorisations under national law.”

While the advocate general’s opinion is non-binding, the court’s judges follow it in most cases. This means Uber, which allows passengers to summon a ride through a smartphone app, may soon be subject to the same local laws that regulate taxi services in European countries.

San Francisco-based Uber said it would await the final ECJ ruling later this year. A spokesman said: “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 It will, however, undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button.”

Uber said more than 7.5 million people and 120,000 drivers in the EU use the app.

The advocate general’s opinion related to a case brought by an association of Barcelona taxi drivers who argued that Uber engaged in unfair competition by using unlicensed drivers.

Uber has just shut down its operation in Denmark following the introduction of new taxi laws. Since arriving in Europe in 2011, the US company has fought many court cases brought by taxi companies and some EU countries. Uber reintroduced a licensed version of its service in Madrid and Berlin last year.

Uber won a high court case in the UK in 2015 that ruled its app was legal in London. The case was brought by Transport for London after pressure from the city’s black cab and minicab drivers, who claimed the Uber app was being used as a taximeter.

The taximeter is a privilege afforded only to black-cab drivers in return for the extensive training they undergo to learn to navigate London’s streets.

Steve McNamara, general secretary of London’s Licensed Taxi Drivers’ Association, welcomed the advocate general’s ruling. “Uber has been ducking both regulation and its responsibilities to its drivers by claiming to be a technology platform that simply connects drivers and riders,” McNamara said. “This false classification has allowed Uber to exploit its workers by forcing them to work long hours on low wages, putting passenger and public safety at risk.”

Uber no longer runs UberPop, its most controversial service, in Spain, but it is still operating in Estonia, Poland, Czech Republic, Norway, Finland and Switzerland.

The company and its executives were fined in France last year for its UberPop service, which lets drivers without professional licences use their own car to pick up passengers for lower fees. Legal challenges have forced the company to halt UberPop in several other European countries, including the Netherlands and Sweden.

The decision before the Luxembourg court is seen as a landmark case in the so-called sharing or gig economy, and could have knock-on effects on other start-ups such as Airbnb and food delivery companies such as Deliveroo.

Georgios Petropoulos, an economist at Bruegel, a thinkank in Brussels, said the final ruling may also influence the employment law battles that Uber is fighting on whether drivers should be given the same rights as workers.

An employment tribunal in London ruled last year that its licensed drivers should be classed as workers entitled to the national minimum wage, sick pay and paid holidays.

The ECJ advocate general said Uber drivers “do not pursue an autonomous activity that is independent of the platform. On the contrary, that activity exists solely because of the platform, without which it would have no sense.”

He argued that Uber could not be regarded as a mere intermediary between drivers and passengers because it controlled economically important aspects of the transport service. “The service amounts to the organisation and management of a comprehensive system for on-demand urban transport.”

A wave of recent executive departures has piled more pressure on Uber, following allegations of sexual harassment and the emergence of video of an abuse-filled row between its chief executive, Travis Kalanick, and one of the company’s disgruntled drivers.