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News

  • 21

    Dec

    2017

    European Court of Justice Overrules Uber

    Yesterday, the European Court of Justice – the highest court of the European Union – enacted landmark legislation ruling that Uber can no longer be seen as offering a digital service and must be regarded as a taxi company instead.

    Historically, Uber’s classification as a digital service rather than a car hire company has enabled them to take a flexible approach to obeying local taxi laws, which has often given them an unfair commercial advantage over competitors.

    However, the European Court of Justice has now declared that a service designed ‘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 classified as ‘a service in the field of transport’ in EU law.

    Frances O'Grady, the general secretary of the TUC, praised the verdict, which will make Uber much more liable for its drivers’ wellbeing.

    ‘Their drivers are not commodities’, she said. ‘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.’

    Professor Andre Spicer of the Cass Business School agreed, especially in relation to Uber’s controversial price scaling model, which varies price in relation to demand, which ‘basically drove everyone else out of the market.’

    ‘The judgement will allow normal competition, so what we will see is lots of other smaller apps appearing around Europe’.

    While Uber says that the verdict won’t affect their European activity, the ruling could have much greater implications for other big businesses working in the gig economy, such as Airbnb and Deliveroo, which are largely based on mobile apps.

     

    All in all, it’s fair to say that 2017 has been a fairly bumpy ride for the rideshare giants. We’re keen to see how they’ll fare in 2018. 

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