The European Union’s highest court has dealt a significant blow to the ride-hailing app, Uber, after they’ve decided the tech company should be regulated as a taxi service instead. The move would likely affect Uber’s stake in other transportation development branches across the continent.
“The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,” states the European Court of Justice.
The ruling, which occurred on Wednesday, can, in turn, affect other technology companies who do not follow traditional country laws. More so, the EU high court has said that member states can regulate the ride-hailing app as they see fit.
The announcement mainly stems from a complaint made by a Barcelona taxi drivers association, which did not want Uber to become a mainstay service in the Spanish city. According to the association, Uber drivers were not regarded as regular cab drivers because they did not have proper authorizations and licenses. If the tech firm would have set up in Barcelona, the association would have seen this act as unfair competition.
Uber defended its position as a tech company by saying it should be regulated as an information service provider because it is based on an app that connects drivers to its users.
The European Court of Justice dismissed the company’s defense and said that the company is “inherently linked to a transport service” thus it should be considered as a field of transport within EU law.
According to an Uber spokeswoman, the ruling will not change their business structure in most EU countries where the company operates.
This decision will not affect Uber’s operations immediately as it already operated under local transportation laws. However, having the highest European authority give permission to its member states to regulate non-traditional transportation services may steer countries into imposing similar laws.
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