BRUSSELS: The EU鈥檚 top court ruled on Wednesday that Uber is an ordinary transportation company instead of an app and should be regulated as such, in a decision that is being closely watched around the world.
Hailed by the plaintiffs 鈥� a Spanish taxi association 鈥� as 鈥渁 social victory,鈥� the case is yet another thorn in the side for US-based Uber, which has drawn the fury of taxi drivers and officials for flouting local regulations.
It also comes the same week as one of its drivers admitted to the attempted rape and murder of a British embassy worker coming home from a night out in Beirut, Lebanon.
鈥淭he service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,鈥� said the Luxembourg-based European Court of Justice.
鈥淢ember states can therefore regulate the conditions for providing that service.鈥�
Uber, the biggest name in the growing gig economy, claims it is a mere service provider, connecting consumers with drivers in more than 600 cities.
Uber has run into huge opposition from taxi companies and other competitors who say this allows it to dodge costly regulations such as training and licensing requirements for drivers and vehicles.
The case was brought by a taxi drivers鈥� association in the Spanish city of Barcelona, where belief runs high that Uber is a taxi company that should be subject to rules governing such vehicles.
鈥淭his will truly represent a social victory, and the whole of society will benefit from this,鈥� Ivan Esma, spokesman for the Elite Taxi association, told reporters, adding that 鈥渢he road will be long鈥� for the ruling to be enforced.
Uber said the ruling would make little difference in practice.
鈥淭his ruling will not change things in most EU countries where we already operate under transportation law,鈥� an Uber spokesperson said in an emailed statement.
鈥淗owever, millions of Europeans are still prevented from using apps like ours.鈥�
In a dense legal judgment, the ECJ said that Uber was a service that connects 鈥渂y means of a smartphone application and for remuneration non-professional drivers using their own vehicle with persons who wish to make urban journeys.鈥�
That means it is 鈥渋nherently linked to a transport service and, accordingly, must be classified as a 鈥榮ervice in the field of transport鈥� within the meaning of EU law.鈥�
The EU court鈥檚 senior adviser had said in a legal opinion in May that Uber was indeed a transport company.
Uber has had a rough ride in Spain, where a judge ruled in 2014 that its UberPop service risked breaking the law, leading to the Barcelona submission to the ECJ.
Early last year it decided to only operate a limited version of its UberX service in Spain, which uses licensed, professional drivers instead of the amateurs who had previously worked via the UberPop application.
Uber has already had problems with the law in several European countries, particularly France where the company was forced to overhaul its business model.
In November a labor court in London, where the company is threatened with losing its license, said it had to pay the drivers a minimum wage and give them paid leave.
Uber does not employ drivers or own vehicles, but instead relies on private contractors with their own cars, allowing them to run their own businesses.
Licensed taxi drivers meanwhile often have to undergo hundreds of hours of training, and they accuse Uber of endangering their jobs by using cheaper drivers who rely only on a GPS to get around.