The European court stops UberPop, not Uber. A new legislation for digital start-ups is needed

Schermata 2017-12-20 alle 11.26.38

 

According to the the court of Justice of the European Union, UberPop, i.e. the local taxi service supplied by Uber through unlicensed drivers, is not a simple digital app used by customers looking for a ride, rather an innovative transportation service subject to general transportation legislations, in particular local taxi rules. Uber therefore fails in claiming that its UberPop service could be classified as a mere Information Society service falling within the ambit of application of freedom of services and European electronic commerce directives. The key reasoning of the court is contained in §§ 37-39 of the judgement: Uber could be in theory a pure intermediation service and, as such, a pure Information Society service. However, Uber also organises the service, sets rules for drivers, checks prices and fixes cars’ quality standards. This is why Uber did not win the case.

Uber was probably expecting this judgment, since previous opinions of the European court had anticipated this position. Therefore, the Uberpop application is likely out-of-law because it will hardly resist against the lobbies of local taxi drivers, while the traditional Uber business model, based on the intermediation between professional drivers and clients will go on, although negotiations with national authorities competent for local transportation may become more complex. Therefore, Uber is expected to continue to concentrate upon value-added taxi services such as UberX, Uber Black, Uber Limo ecc (where service providers are regular taxi drivers, not private citizens) and will keep UberPop only when possible in few countries. It is however doubtful whether Uber will be able to extend its activities upon new services (such as delivery of foods and goods in general) through non licensed workers (mainly students or young people) as far as local policies and authorisation may become a barrier.

Fact is, the impact of today’s judgement may be more relevant in sharing economy sectors where the activity of non licensed workers/private citizens is prevailing (such as Airbnb, for instance, or many start-ups). The principles stated by the court may become far restrictive for innovative digital services rendered by such non professional workers, since it requires them the be subject to the general legislation of the sector (if any). In the case of Uber, as previously stated, this means the likely end of UberPop, not of other transportation services provided by licensed taxi drivers via the same platform (Uber X, Uber Limo, ecc). The situation is more complex for other popular app such as, for instance, AirBnb: one could question whether this is a nice app helping custumers to find accomodations or a true hotelling service, subject to all kind of legislation for hotels.

The same may happen for any new application intermediating innovative entrepreneurs and nonlicensed/private citizens. In the end, it is likely that the European Commission will soon intervene ad hoc with new legislation, since the ruling by the European Court does not prevent it from legislating on the matter so as to adapt the European directives applied until now. It would not be a question of liberalizing the taxi service, but of adapting existing regulations (transport, labour, etc.) to the new challenges of the sharing economy, for example by paying special attention to start-ups and SMEs. The problem is not so much Uber and the public taxi service, rather the preparation of a regulatory framework certain and adequate for new innovative companies and the digital economy.

The European court itself seems to invite the European institutions to intervene where, in  §§ 46-47 of the judgement), recognizes that non-public urban transport services and services that are inherently linked to those services, such as the intermediation service provided by Uber, has not given rise to the adoption of measures based on transportation policies

Schermata 2017-12-20 alle 11.35.19

 

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