Uber has been deemed a taxi company by the highest court in Europe. On Wednesday, the European Court of Justice (ECJ) ruled that the ride-hailing company based in the U.S. is a transportation company and not a digital firm.
That judgement is expected to have huge implication for how the ride-hailing company is regulated across Europe.
In its ruling, the ECJ stated that the service Uber provided connecting people with drivers who are non-professional is covered by services in the transportation field. The ruling added that member states therefore can regulate conditions for the providing of that service.
Uber had considered itself since its inception an “information society service,” that connects passengers with drivers through their app.
The subtle classification has been helpful in protecting the start-up now worth billions from nationwide regulations and has helped it to be treated as digital service that is operating across the many borders in the single EU market.
Several governments in Europe have argued that the company should be deemed a taxi company, and like thousands of others like it, should be required to comply with the transportation laws of Europe.
A spokesperson for Uber said shortly after the announcement of the ECJ ruling, that it did not change things in most countries within the EU where Uber is already operating. However, millions of people in Europe are not able to us apps like Uber’s.
The decision by the ECJ means that Uber now faces regulation on a national level in as many as 28 EU member states, which will force it to deal in a closer manner with the local government that set up regulations for transportation and corresponding licensing requirements.
This case is not able to be appealed, but legal challenges can be pursued in other courts.
In 2014, a group in Barcelona known as Elite Taxi asked a court there to impose penalties on the operations of Uber in Spain. The association claimed Uber was carrying out unfair competition with drivers from Elite Taxi, in particular with its service UberPop, which allowed drivers who were not licensed to pick passengers up with the use of an app.
That case moved through the court system and eventually reached the highest court in the European Union.
Five years ago Uber launched its first service in Europe and since has faced several challenges with regulators and with traditional taxis, which protest against the company that has been given a worth of more than $66 billion.