HR · 21 December 2017

Uber to face tougher regulations after European courts rule it a transport firm

Uber's Birmingham office
Uber was reclassified as a “service in the field of transport”

Taxi-hailing platform Uber has been officially labelled a transport company in a European law court, in a ruling that could have significant implications for the gig economy.

In a case between Uber and a group of taxi drivers from Barcelona, the European Court of Justice (ECJ) ruled in favour of the taxi drivers, that Uber should be classified as a “service in the field of transport” within the meaning of European law.

The ruling is another step closer towards the reclassification of Uber drivers generally as employees, as opposed to self-employed, which should therefore be eligible to a greater array of workers’ rights under UK employment laws.

Lawyers from Barcelona’s Asociación Profesional Elite Taxi argued that because Uber was directly involved with carrying passengers, EU rules on the freedom to provide services – which exclude transport companies – should not apply to the firm’s EU-wide operation.

Read more: How will Uber’s legal controversies effect the status of gig economy workers?

Uber’s lawyers, on the other hand, claimed the platform was a computer services business, with operations that should be subject to an EU directive governing ecommerce.

The ECJ dubbed Uber as an “intermediation service”, the purpose of which 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 regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of EU law”.

“Such a service must be excluded from the scope of the freedom to provide services in general, as well as the directive on services in the internal market and the directive on electronic commerce,” the ruling went on to say.

The ECJ concluded that Uber held “decisive influence” over the conditions its drivers provided their services, meaning the platform provided an intermediation service that, in effect, formed part of a much wider overall service, the main aspect of which was transport.

From now on, under EU rules, it will up to individual member states, including the UK, to regulate the conditions under which Uber is provided in a way that conforms generally with EU law.

Partner in the Employment law team at Blake Morgan, Sarah Peacock, said: “The tide is now firmly against businesses side-stepping holiday pay, the national minimum wage, auto-enrolment and working time limits.

“Despite this ruling relating to Uber obeying taxi rules in Barcelona and not to the employment status of the drivers, the case could have an impact on the further appeals which Uber is lodging.”

“Last year, an employment Tribunal ruled that Uber drivers were ‘workers’, not ‘self-employed’, and the Employment Appeal Tribunal (EAT) agreed earlier this year. Uber have been refused permission to leapfrog their appeal to the Supreme Court, so it will now go to the Court of Appeal.”

Commenting on the ECJ’s ruling, a spokesperson for Uber in the UK told The Guardian: his ruling will not change things in most EU countries, where we already operate under transportation law.

“It is appropriate to regulate services like Uber and so we will continue the dialogue with cities across Europe. This is the approach we’ll take to ensure everyone can get a reliable ride at the tap of a button.”

UrbanThings: Doing for buses and trains what Uber did for taxis

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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