European Court of Justice determines Uber will be regulated as transportation service

Uber is a disruptive force and though it has produced many benefits for consumers it has also understandably generated much hostility. Thomas White  Reuters

Uber suffered a blow yesterday when the European Court of Justice ruled that the ride-hailing app was a transport company and not "an information society service" as it claimed. The ECJ ruling, which can not be appealed, stated that firm "must be classified as a service in the field of transport within the meaning of European Union law". Hailed by the plaintiffs - a Spanish taxi association - as "a social victory", the case is yet another thorn in the side for US-based Uber, which has drawn the fury of taxi drivers and officials for flouting local regulations.

One implication of the ruling is that the company will now be regulated as transport company, meaning that the rules it is subject to can be set on a country-by-country basis.

Uber insisted that the ruling would have no impact on the way it operated in the United Kingdom and most other European countries where it was already subjected to local taxi regulations.

The Uber letter also said that 2.6 percent of United Kingdom drivers are logged in for more than 70 hours a week, and 0.8 percent for more than 80 hours. "It is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe". Furthermore, without the mobile app, the "persons who wish to make an urban journey would not use the services provided by those drivers".

The decision clarifies for the first time that connecting people via an app to nonprofessional drivers forms an integral part of a transport service.

Frances O'Grady, general secretary of the Trades Union Congress in the United Kingdom, lauded the decision. Here, the firm argued that it was primarily a technology company, with its app bringing self-employed drivers together, rather than an employer.

And while Uber continues to operate in the largest European Union countries, it does so under threat of legal action and impairment to its business. "Their drivers are not commodities".

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The company will also be appealing against a November ruling which found its workers were entitled to the minimum wage, sick pay, paid holiday and breaks. "Advances in technology should be used to make work better, not to return to the type of working practices we thought we'd seen the back of decades ago".

In fact, the biggest changes might come not to Uber but to other startups that use a similar model for everything from getting food and groceries delivered to hiring cleaning services or handymen.

Traditional taxi firms, who have fallen into difficulties since the rapid expansion of Uber and Grab in Viet Nam in recent years, called for equality in management.

The decision in theory applies to ride-hailing services around the 28-nation EU.

Uber has had a roller-coaster year that also included the ouster of its CEO, sexual harassment allegations and the revelation that it covered up a massive breach of customers' data.

"What is fascinating about this right now is that different countries are taking very different views".

Harford has worked for and competed with Khosrowshahi, 48, in the online travel business.

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