Uber is still waiting for a final resolution in London, where the taxi companies (and their unions) are trying to force them out of business through the leverage of the courts. But their problem, along with Lyft and any other ride-sharing apps, just grew exponentially larger on the other side of the pond. The European Union has stepped in on behalf of a taxi union in Spain and delivered a ruling which will affect them across all member states. The laughably named European Court of Justice has ruled that Uber is a taxi company rather than a technology service and should therefore be regulated as such. (Washington Post)
Ride-hailing service Uber suffered a new blow Wednesday as the European Union’s top court ruled that it should be regulated like a taxi company and not a technology service, a decision that could change the way it functions across the continent.
The ruling Wednesday by the Luxembourg-based European Court of Justice could affect other technology companies and how they are regulated around the EU, and reflects a larger dilemma about how governments should treat companies that operate online and don’t fit in with traditional laws.
The decision stems from a complaint by a Barcelona taxi drivers association, which wanted to prevent Uber from setting up in the Spanish city. The taxi drivers said Uber drivers should have authorizations and licenses, and accused the company of engaging in unfair competition.
Let’s just leave aside for the moment the fact that Uber winds up following the same rules for background checks, licensing and insurance as any livery service wherever they set up. This is more a question of defining the corporation and the services that it provides. Uber isn’t a taxi company by any reasonable definition. They provide an app which allows independent drivers to hook up with people looking for rides. It’s the internet based equivalent of a bulletin board. They don’t own any cars, nor do they employ any drivers. In exchange for this service, they collect a fee on all of the rides which wind up being arranged through their service.
The origins of the complaint in Europe are also revealing. This wasn’t a question of safety or standards in any fashion. A taxi driver’s association (read: union) in Barcelona didn’t want Uber setting up shop in their city because they didn’t want to have to deal with the competition. This sense of entitlement can be greatly amplified if government officials are profiting nicely from the status quo in the car service market. And now they have the EU courts on their side, which is not surprising because most of the EU leans heavily socialist and they’re really not into that whole individualism and entrepreneurship thing.
Much like the situation in London, the government may step in and try to stamp out Uber and Lyft to protect the unions, but they’ll eventually have to answer to their own citizens. There are 3.5 million Uber accounts in London alone. (That’s more than a third of the population of the city.) If their government chooses to squelch competition by eliminating a popular new service, it’s up to the consumers to vote with more than their wallets and replace their elected representatives with people who aren’t stuck so deeply in the pockets of the taxi companies and the unions.