Court of Justice rules on Uber

The Court of Justice of the European Union (CJEU) issued a judgment on the nature of Uber’s activity in the light of the European Union’s regulations. According to the EU’s top court, Uber provides services in the field of transport rather than intermediation between clients and drivers. It means that following the court ruling Uber may be obliged to comply with the Member States’ policies and regulations on passenger transport.

Spanish taxi drivers’ legal battle

The legal action was brought in front of the Spanish commercial court in 2014 by Elite Taxi – an association of professional taxi drivers in Barcelona claiming that UberPop services infringe the Spanish  competition rules. UberPop enables the users of electronic application to book a ride to a specified destination whereas the ride is performed by non-professional drivers using their own vehicles. The commercial court has decided that before the judgment on competition rules may be issued, it should first be clarified whether the Uber’s activity should be classified as a transportation service subject to prior administrative authorization in Spain.

Consequently, the court has decided to stay the local proceedings and refer questions to the CJEU. It asked in particular whether the activity carried out by Uber, consisting of acting as an intermediary between the owner of a vehicle and a person who needs to make a journey within a city, by managing the “smartphone and technological platform” interface and software application should be considered a transport service or should it be considered an electronic intermediary service or an information society service?

Having analyzed the nature of the services – CJEU decided on 20 December (case C-434/15) that Uber’s electronic intermediation must be regarded as forming an integral part of an overall service whose main component is a transport service. Consequently the CJEU claimed that the services must be classified as ‘a service in the field of transport’.

Uber to follow local passenger transport rules

Such classification of Uber’s services means that they may fall out of scope of the European Parliament’s Directive 2006/123 on services rendered in the internal EU market and the Directive 2000/31 on electronic commerce whereas both these regulations provide for general simplifications for entrepreneurs rendering cross border e-services. Instead, Uber may face having to comply with local regulations on passenger transport adopted by each of the Member States Uber operates in which may prove burdensome and limiting Uber’s EU expansion.