The European Court of Justice has ruled Uber is a taxi firm and should be regulated as such, dealing a regulatory blow to the American company.
Wednesday’s decision came after taxi drivers in Barcelona launched a legal challenge over Uber’s use of non-professional drivers.
The ruling will apply across the European Union, including in the UK. Uber said the decision “will not change things” in most countries where it operates.
Uber has long argued it is a technology company, not a taxi firm, and the ruling will mean the company could potentially face new regulations limiting its operations.
The court’s ruling said that, as a taxi firm, Uber “must be excluded from the scope of the freedom to provide services in general as well as the directive on services in the internal market and the directive on electronic commerce.”
The case follows a complaint that Uber’s activities in Spain amounted to misleading practices and unfair competition from Uber’s use of non-professional drivers, a service Uber calls UberPOP.
Judges said Uber “exercises decisive influence over the conditions under which the drivers provide their service” and that without the Uber mobile app “persons who wish to make an urban journey would not use the services provided by those drivers.”
In an emailed statement, Uber said the ruling wouldn’t impact its business in “most EU countries”.
“This ruling will not change things in most EU countries where we already operate under transportation law. However, millions of Europeans are still prevented from using apps like ours,” a spokesperson said.
“As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe. This is the approach we’ll take to ensure everyone can get a reliable ride at the tap of a button.”
The firm added that it conforms to “current regulations” in countries such as France and the UK and that Wednesday’s ruling relates to “peer-to-peer” services.
‘Good news for drivers’
But Uber’s political opponents seized upon the news, with Green Party co-leader, Jonathan Bartley, describing the decision as good news for those employed in the so-called “gig economy”.
“Uber has learned today that it can’t continue to use euphemisms to get round complying with the law. If it looks like a taxi company, and acts like a taxi company it probably is a taxi company,” Bartley said.
“This announcement is significant not just for Uber drivers and passengers but is good news for anyone employed by the likes of Deliveroo, Hermes and all those who seek to turn an insecure economy into one that supports workers and families and is of benefit to society.”
And Michael Newman, an employment solicitor at law firm Leigh Day, which represents drivers and trade unions in legal action against Uber, told HuffPost UK the ruling is the latest to not go the firm’s way.
But he cautioned: “I think the impact will be tangential at best, but it does show the courts aren’t afraid of stepping in when needs be.
“It’s helpful as Uber has spoken about itself as a technology company.”
Uber lost its operating licence in London in September over public safety concerns. The firm is currently appealing the decision.
And it has faced challenges in other cities too. Last week, Sheffield City Council announced the firm had its licence in the city suspended.