Uber-EU court decision: What the defeat means for customers and drivers across UK and Europe

Case could see the company face more stringent regulation across the Continent

TUC general secretary Frances O’Grady said the verdict meant Uber must ‘play by the same rules as everybody else’ (Getty)

Uber has been dealt a major blow after the European Court of Justice ruled that it is a transport company, not a digital platform, as the company had contended. But what exactly does the decision mean for drivers and passengers across the continent?

What is the decision?

Europe’s top court had been asked to rule on a case brought by Spanish taxi drivers who argued that Uber should be subject to the same rules as normal cab companies.

​Uber has consistently claimed that it is merely a platform that connects passengers with drivers.

The ECJ disagreed, ruling that a service whose purpose 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 legally classified as a transport company.

What does this mean for the way Uber operates?

It means Uber may be subject to increased regulation.

EU governments previously had to prove to the European Commission that any restrictions they put on Uber’s business are “reasonable” and “proportionate”, as this is required for digital companies under single market rules.

This is not required for transportation services which are regulated at the national or local level to a larger extent.

Will this make a difference for passengers?

The US company said that the verdict would make little difference to the way it operates in many areas because it already operates under local laws governing transportation firms.

However, others have suggested that it will have wide-ranging implications for not just Uber, but the wider gig economy.

The exact ramifications are unknown right now because the ECJ has simply ruled that the EU member states are right to treat Uber in the same way as other taxi firms. How each state interprets that is up to them but it is likely to mean more strict controls on Uber.

The company has attracted criticism for failing to carry out adequate safety checks in some jurisdictions. This could be one area that local regulators might crack down on.

Will Uber’s fares increase?

That is uncertain, but if Uber had to comply with additional regulations it would also face extra costs. These would likely be passed on to drivers and ultimately to passengers at some point, meaning there is a possibility that fares could rise.

What wider implications might there be for the gig economy?

The Uber ruling specifically related to Uber’s peer-to-peer service, UberPOP, which connected unlicensed drivers with people needing a lift. This could mean that a similar argument could be made to reclassify other services that are now deemed to be digital p2p platforms.

Rohan Silva, a tech entrepreneur and former adviser to David Cameron, said that sharing economy services like Airbnb will probably face regulation as a result of the ECJ ruling.

The IWGB union, which has brought cases against Uber and Deliveroo in the UK over drivers’ rights said the ruling was “one more nail in the coffin for Uber’s argument that it is simply an agent acting on behalf of drivers and therefore not liable to pay them minimum wage and holidays”.

How have people reacted to the ruling?

TUC general secretary Frances O’Grady said the verdict meant Uber must “play by the same rules as everybody else”.

She added: “Their drivers are not commodities. They deserve at the very least the minimum wage and holiday pay.

“Advances in technology should be used to make work better, not to return to the type of working practices we thought we’d seen the back of decades ago.”

Bernardine Adkins, head of EU, trade and competition law at Gowling WLG, welcomed the “vital clarity” that the ECJ’s decision had given to Uber’s status in the taxi market.

“Uber’s control over its drivers, its ability to set prices and the fact its electronic service is inseparable from its ultimate consumer experience means it is more than simply a platform connecting drivers to passengers,” Ms Adkins said.

“For Uber, this means it needs to comply with the relevant transport regulations governing local taxi services.”