(CN) – In an opinion that may thwart Uber’s expansion in the European Union, a European Court of Justice adviser said Thursday the ride-hail upstart is a transport service and must get licenses as required by national law.
A union of taxi drivers in Barcelona sued Uber’s Spanish subsidiary in 2014, claiming unfair competition. The cabbies said Uber has no business operating in Barcelona since none of its drivers or the vehicles they use have the licenses and authorizations required for taxi services under the city’s ordinances.
The Spanish court hearing the case asked the European Court of Justice for clarification on Uber’s service under EU law, namely whether it should be regulated as an information-society service – subject to EU law – or a transport service, which is governed by national laws.
In an 11-page advisory opinion for the EU high court, Advocate General Maciej Szpunar called Uber a “composite service” – part electronic, since users hail Uber drivers using an app on their smartphones, and part transport since users are essentially hailing a cab.
Szpunar said that while some composite services may fall under the authority of EU law as an information-society service, Uber doesn’t meet the two criteria: the act of driving for Uber is economically dependent on the electronics of the app, and Uber exerts total control over its drivers and the fares charged.
Uber therefore cannot be considered an intermediary between passengers and drivers, and since the way drivers and passengers are connected – by the app – is not self-standing and the app can’t drive passengers to their destinations, Uber is a transport rather than information-society service and is regulated by Spanish law, Szpunar said.
The adviser also rejected the argument that Uber’s service is a ride-sharing service, since the destination is selected by the passenger and the service costs far more than what could be considered “sharing.”
Szpunar’s opinion is not binding on the Luxembourg-based high court, which has begun its own deliberations in the case.