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Uber can be regulated as transport provider, advocate general states

12 May 2017

The taxi type service provided by Uber is properly regarded as a "service in the field of transport" rather than an "information society service", and can be made subject to appropriate conditions, an advocate general of the EU Court of Justice has stated.

Advocate General Maciej Szpunar gave his opinion in a case referred from the Spanish courts, brought by Elite Taxi, a professional association of taxi drivers in Barcelona which sought the imposition of penalties on Uber Spain for engaging in unfair competition.

Elite Taxi maintained that Uber Spain was not entitled to provide its UberPop service, which involves non-professional private drivers transporting passengers using their own vehicles, in Barcelona, as neither Uber Spain nor the owners or drivers of the vehicles concerned had the licences and authorisations required under the city of Barcelona’s regulations on taxi services.

Uber claimed that its platform benefited, as "information society services", from the principle of the freedom to provide services, and Barcelona’s regulations concerning its operation were incompatible with that principle.

In his opinion the advocate general concluded that, although it was for the national court to determine and assess the facts, the service in question was a composite service, since part of it was provided by electronic means while the other part, by definition, was not. A composite service might fall within the concept of "information society service" where (1) the supply which was not made by electronic means was economically independent of the service which was provided by that means (for example, for purchasing flights or making hotel bookings), or (2) the provider supplied the whole service (both the part provided by electronic means and that provided by other means) or exercised decisive influence over the conditions under which the latter part is provided, so that the two services formed an inseparable whole – provided the main component (or indeed all essential elements of the transaction) was supplied by electronic means (for example, the online sale of goods).

Uber's service did not meet either of those conditions. Drivers on the Uber platform did not pursue an autonomous activity independent of the platform: their activity existed solely because of the platform, without which it would have no sense. Further, Uber imposed conditions that drivers had to fulfil in order to take up and pursue the activity, structured their financial rewards, exerted controls, albeit indirect, over the quality of their work, and effectively determined the price of the service. All those features meant that Uber could not be regarded as a mere intermediary between drivers and passengers.

In addition, in the context of the composite service offered by the Uber platform, it was undoubtedly transport (namely the service not provided by electronic means) which was the main supply and which gave the service meaning in economic terms.

Consequently, the service offered by Uber could not be classified as an "information society service", but instead amounted to the organisation and management of a comprehensive system for on-demand urban transport. Moreover, it was not a ride-sharing service, since the destination was selected by the passenger and the driver was paid an amount which far exceeded the mere reimbursement of costs incurred.

It followed from that interpretation that Uber’s activity was not governed by the principle of the freedom to provide services in the context of "information society services", and that it was thus subject to the conditions under which non-resident carriers might operate transport services within the member states (in this case, possession of the licences and authorisations required by the city of Barcelona’s regulations).

The Court of Justice will give its ruling at a later date. The advocate general's opinion is followed in around 80% of cases before the court.

Click here to view the opinion.

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