Uber is attempting to convince Europe that it is not a transport company. The battle will come to a head next week when the company will present its case before Europe’s top court. Uber will attempt to get the courts to believe that instead of being a transport service, it is simply a digital platform that facilitates cab bookings.
The case is actually more important than you think, and will have huge implications upon Uber’s future in Europe. As things stand now, Uber is exempt from a lot of difficult-to-navigate rules and regulations that are compulsory for other taxi companies. This is because laws the world over tend to be slightly loose for digital platforms and startups — so as to encourage the use of technology in businesses.
However, Uber’s competitors don’t look too kindly upon this arrangement. The company is a huge threat to taxi operators and had been posing a serious threat to their businesses as it is. Giving it the benefit of easier rules is not going down too well with competition. In 2014, Uber had to cease its UperPOP services after allegations from Barcelona’s main taxi operator that it was running an illegal taxi service. And that is not the only place where it has faced the ire of local services — who are sometimes joined by authorities.
Uber on the other hand, is adamant upon its statements. Indeed, it would become very difficult for the company to function otherwise. The company’s current business model is all about offering flexibility to its drivers — minus the basic rights they, as employees would be entitled to — scrapping it and calling its drivers as employees would largely make Uber a huge transportation company with huge liabilities on its head. As things stand now, the company can shrug off responsibility to the person driving the car in many cases.
After Spanish courts found themselves unable to reach a clear decision, the asked Luxembourg-based European Union’s Court of Justice to take over the case. And that is exactly where Uber will be making its case next week. The company hopes to be able to convince the judges that it is merely a digital platform that connects willing drivers and passengers with each other.
Meanwhile, Europe itself seems to be divided on the case. While the Netherlands, Finland, Poland, Greece and the European Free Trade Association (EFTA) support Uber’s claims and have submitted written observations to that effect — countries like Spain, France and Ireland are rooting for Uber’s classification as a transport service.
Meanwhile, the outcome of this case could have far reaching consequences. If Uber is identified as a transportation company, it will be forced to follow the same guidelines that its competitors do — which will mean the significant blow to the company. Such a decision could also start a cascading effect where aggregators — whether it is cabs, rooms or any other thing under the sun — will be forced to rethink their legal status and business strategies.