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This can be considered a significant setback for Uber, who seems to have failed to convince the EU court that it is merely an app-based ride-hailing service. An advisor to the European Union’s top court has today voiced his views about Uber not merely being a technology giant connecting passengers and drivers with each other.

EU Court’s Advocate General Maciej Szpunar has rejected the company’s previous argument that it is not just an intermediary medium between driver and riders — distributed via a mobile app. Instead, he believes that the app is providing the users with services apart from connecting them with each other. Thus, the $68 billion ride-hailing giant has been termed as a transport company by the court and said that it should be subject local transportation laws governing such bodies.

Speaking on it being more than a technology giant, the European Court of Justice in a statement said,

The Uber electronic platform, whilst innovative, falls within the field of transport: Uber can thus be required to obtain the necessary licences and authorizations under national law.

As per an official ruling, the advocate general has passed the aforementioned judgement because he views the matching of drivers and passengers as a secondary component of the service. Szpunar is of the opinion that the primary task which Uber’s app accomplishes is maintaining a seamless supply of vehicles — operated by self-employed and registered drivers. He further goes on to add that drivers it employs do not operate independently and Uber controls the economic aspects of the urban transportation system in the EU.

With regards to the same, he goes on to appeal to the court that the service offered by Uber’s ride-hailing platform should be classified as a service in the field of transport. This statement simply means Uber is not an aggregator of transportation services but a transport company itself. It should come under local motor laws, according to which other taxi and transportation firms operate. They are way more strict and require the company to pick up necessary permits to operate in the European Union.

Continuing to talk about the same, the ruling adds,

It follows from that interpretation that Uber’s activity is not governed by the principle of the freedom to provide services in the context of ‘information society services’ and that it is thus subject to the conditions under which non-resident carriers may operate transport services within the Member States.

These are, however, the general views of the advocate general against Uber not being a smartphone-based technology company. This decision is non-binding and doesn’t affect Uber’s current operations but ECJ courts are known to follow the advice of these EU court advisors. A final decision on Uber staying operational as a technology giant or being termed as a transport company will be made later this year.

In response to the advocate general’s opinion, an Uber spokesperson in a statement said (via Business Insider),

We have seen today’s statement and await the final ruling later this year. Being considered a transportation company would not change the way we are regulated in most EU countries as that is already the situation today.

It will, however, undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button.

Uber is currently caught up in this situation because of its competitors, i.e local taxi and transport companies. They do not look too kindly upon the ride-hailing giant as they consider Uber a huge threat to their operations. Giving Uber the benefit of easier transport rules is not going down too well with competition and they’ve alleged the ride-hailing giant of unfair competitive practices. Then, the case was referred to the ECJ in 2015 and asked to halt its UberPOP service, which made a return with licensed taxi drivers very soon.

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