A recent EU decision means bad news for Uber
The ride-sharing app Uber has managed to avoid the regulations faced by other taxi companies since its inception. But on December 20th, after an EU court classified it as a transportation service, the app could be facing a financial blow in the face of heavy regulations.
Uber currently operates in more than 600 cities around the world. The creators of the app have argued that it should be classified an online service rather than a transport service in the EU, claiming that the app simply acts as a go-between for drivers and potential customers. But the European Court of Justice ruled otherwise.
The new ruling could prevent Uber from expanding its services from non-professional drivers in Europe. It could also cause the app to be subject to stricter licensing rules and to start charging sales tax to customers. Other apps that rely on contract workers, like Lyft or TaskRabbit, could face similar restrictions in the EU after this decision.
The lawsuit was brought forward by a taxi company in Barcelona that felt it was unfair that Uber was not held to the same standards. The company took issue with Uber’s peer-to-peer ride service called UberPop, which has since been discontinued in several countries including Spain.
Former employees of Uber have been fighting for employee rights for a while, and now the conversation is starting to go global. In October 2016, an English court ruled that Uber drivers deserve employee benefits and can’t be treated as self-employed contract workers. This decision meant that about 40,000 Uber drivers in the U.K. could file claims against the company. And in April, a class-action lawsuit filed in Los Angeles accused Uber of not paying its employees fairly.
The new EU ruling has huge implications for Uber and other companies like it. We hope that this decision results in more rights for independent contractors. But for now it just confirms what we knew all along: Uber is a taxi service, plain and simple.