Commentary

Ruling That Uber Is A Cab Company May Have Impact On Gig Economy

Call it what you will — online service provider, vanguard of the gig economy, leading-edge tech company, paragon of misguided leadership — in the end, Uber is a fleet of taxi cabs and should be regulated as such, according to a final judgement by the European Court of Justice in Luxembourg today.

“The ruling from Europe's highest court found that Uber ‘must be regarded as being inherently linked to a transport service and, accordingly, must be classified as a service in the field of transport,’” writes Bethany Minelle for Sky News. “In short, this means Uber will now be officially recognized as a cab company rather than a technology company.”

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“This ruling will not change things in most EU countries where we already operate under transportation law,” a Uber spokesman said.

Indeed, “Uber has played down the implications of the judgment which looked at its peer-to-peer taxi service UberPOP that connects drivers without commercial car licenses to riders. The service, which was originally challenged by a taxi drivers’ association in Barcelona, Asociacion Profesional Elite Taxi, currently operates only in Poland, the Czech Republic, Slovakia and Romania,” report Mehreen Khan and Aliya Ram for Financial Times.

“Uber has since relaunched the peer-to-peer system as a regulated taxi and private hire business in other European cities including Madrid and Berlin,” they continue.

The judgment … won’t force Uber to curtail most of its services in Europe, but the decision is a blow to the company’s efforts to use courts to lighten its regulatory load — and forces it to deal more directly with national and local governments that set rules governing car and transport services in Europe,” writes Natalia Drozdiak for the Wall Street Journal.

 “While this particular court case cannot be appealed, Uber can pursue other legal challenges in courts to defend its business,” Drozdiak observes.

But beyond the impact on Uber, TaxifyLyft and other competitors, the BBC’s Theo Leggett points out that the decision “could ultimately have an impact, not just on ride-hailing services, but on other gig economy services — such as couriers and accommodation providers — who operate a similar model.”

“There could be big implications for a sharing economy service like Airbnb, which will probably be regulated by the EU,” Rohan Silva, a tech entrepreneur and former adviser to former British prime minister David Cameron, said on Radio 4's “Today” program, Leggett reports. “What is fascinating about this right now is that different countries are taking very different views. Portugal has legalized Uber and Airbnb, whereas France is clamping down,” Silva continued.

Fascinating, in particular, for lawyers, barristers and paralegals who stand to rack up billings for years to come.

“‘We regret the judgment effectively threatens the application of harmonized EU rules to online intermediaries,’ said Jakob Kucharczyk, of the Computer & Communications Industry Association, which speaks for companies like Uber, Amazon.com Inc., Google and Facebook Inc.,” write Stephanie Bodoni and Adam Satariano for Bloomberg Technology.

“‘The purpose of those rules is to make sure online innovators can achieve greater scalability and competitiveness in the EU, unfettered from undue national restrictions,’ he said. ‘After today’s judgment innovators will increasingly be subject to divergent national and sectoral rules. This is a blow to the EU’s ambition of building an integrated digital single market.’”

While the gig economy may be good for consumers, investors and app programmers, it’s under scrutiny for its impact on the working class.

“A British review of ‘modern working practices’ urges changes such as reclassifying gig-economy workers as ‘dependent contractors' who would be entitled to employee benefits and social security. The European Commission is also backing proposals to combat declining standards for those with ultra-flexible working hours and no regular salaries,” reports Liz Alderman for the New York Times.

Alderman cites the case of Mohaan Biswas, a student in London who broke a foot when a car hit his motorbike while he was carrying food for Deliveroo. He was not paid sick leave while recovering.

“You end up trapped in this kind of cycle,” Biswas tells Alderman. “The biggest shock, he added, was to ‘feel you’re in the hands of other people who ultimately just don’t care: They don’t care until you come back in as a cog,’” she writes.

Gig workers of the world, unite!

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