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

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

Uber Technologies Inc. suffered a major defeat in its effort to overturn strict rules and licensing requirements in Europe after the bloc's highest court on Wednesday ruled the ride-hailing company should be regulated as a transportation service, rather than a digital service.

In its ruling, the ECJ said that a service whose goal was "to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys" must be classified as "a service in the field of transport" in European Union law.

Tho said rapid technology development was posing challenges to State management agencies due to confusion in defining whether Uber and Grab were technology platforms connecting passengers with drivers or transportation companies.

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.

In contrast, rules for digital platforms - which the company had argued it was - are set Europe-wide.

In response to Wednesday's ruling, one Barcelona-based taxi firm, Elite Taxi BCN, tweeted: "Today is a great day, we trust in justice to declare Uber a transport company". But the judgment dashes any hopes of regulatory rollback in those jurisdictions and could embolden regulators to impose more onerous restrictions on the company.

In Spain, the company operates through tourism transportation licenses issued in some cities, but its peer-to-peer service that prompted the lawsuit is banned.

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

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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.

Poland, Czech Republic, Slovakia and Romania are the only countries where the company still offers such peer-to-peer services, and where Wednesday's ruling might have a direct impact.

However, Uber's operation across Europe has enraged traditional taxi services across Europe, from Denmark and the United Kingdom to Greece and Italy.

Uber has gained a strong foothold and customer base in most European countries, adapting its multiple services time and again to bend to local rules when faced with legal challenges.

Taxi drivers in Barcelona's streets honked their horns in victory.

Tho admitted that many rules were now no longer appropriate, creating an unfair environment between traditional taxi firms and new ones like Uber and Grab. It said the ruling "confirms that Uber does not simply exist "on the cloud" but is well established with its wheels firmly on the road".

Hoang Thi Ha Giang, Deputy Director of the Tax Policy Department, said clear regulations were needed to efficiently collect taxes from Uber and Grab, which was stil a headache. They also charged Uber with "misleading practices".

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