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  HOME | Business & Economy (Click here for more)

Uber Suffers Blow as EUís Top Court Rules Itís a Transport Company

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

The judgment by the European Court of Justice is a blow to Uberís efforts to use courts to lighten its regulatory load and forces it to deal more directly with national and local governments that set rules governing car and transport services in Europe.

Those authorities have sought to hold Uber to often-strict rules and licensing requirements that apply to taxi and traditional car-hire services.

While this particular court case cannot be appealed, Uber can pursue other legal challenges in courts to defend its business.

Uber has tussled with taxi companies and regulators around the world for much of its eight-year history, but the scrutiny has been especially intense in Europe.

There, it has faced local or national bans on at least some of its services in Italy, Germany, Belgium, the Netherlands, Spain and Hungary and sometimes violent protests from entrenched taxi services.

Uber has long tried to fight local transportation laws by arguing it isnít a transportation company but rather an online platform, which is protected under EU law from disproportionate regulation.

In its judgment, the ECJ said nonprofessional drivers using their own cars to give rides to passengers ďmust be classified as Ďa service in the field of transport.íĒ

Uber has said such a ruling would not change the way it functions in most EU countries because it already operates under transportation law there. But the judgment dashes any hopes of regulatory rollback in those jurisdictions and could embolden regulators to impose more onerous restrictions on the company.

The court case originates from legal action filed by Elite Taxi, a Barcelona-based association of independent taxi drivers, which is seeking penalties against Uber for operating its low-cost Uberpop service without the necessary taxi licenses and authorization from the city.

Elite has argued Uber was competing unfairly by building a new model for transportation without the costs normally associated with it.

Uber and Elite didnít immediately respond to requests for comment.

 

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