According to the EU Court of Justice, the union’s top court, Uber is a cab firm and should be regulated like one. This means that the U.S.-based ride-hailing firm will have to obey the stricter rules that govern private transportation firms.
The decision comes at odds with Uber’s claim that it is a digital company since its only job is to connect people with their drivers electronically. What’s more, none of its drivers are employees of the company. They’re contractors, Uber argues.
After this Wednesday’s decision, however, the company will have to treat its European drivers like they are genuine employers. Uber cannot appeal the decision.
According to the court’s documents, a company that connects people with drivers for the scope of remuneration belongs to the field of transport. This means that the EU’s member states can regulate Uber as a transportation service.
Uber’s Now a Cab Firm in Europe
In some parts of Europe, Uber was forced to shut down its controversial UberPop, a service that allows drivers to get a share of the revenue without making a profit in countries that bar unlicensed drivers from providing taxi services.
After the decision, Uber said the European Court of Justice’s move wouldn’t affect the way it does business across Europe. The firm noted that in many countries, it obeys transportation rules.
The case is the result of five years’ worth of disputes over Uber’s legal status. Traditional taxi firms have accused Uber of unlawfully entering the market without paying the due fee and taxes. In some countries, Uber was met with violent protests.
The ruling is very important as it can affect other businesses that operate within the so-called gig economy. EU regulators have promised to issue some rules for the sharing economy as well since temp workers earn significantly less than those with a permanent position.
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