North Carolina Journal of International Law

Volume 43

No Five Star Rating for Uber, says the European Union’s Highest Court

By: Leigh Edwards

epa06316606 A close-up image showing the Uber app on an iPhone in Kaarst, Germany, 08 November 2017. EPA-EFE/SASCHA STEINBACH ILLUSTRATION

Uber Technology Inc. (“Uber”), a global taxi technology company operating in over 600 hundred countries, allows passengers to summon rides through apps on smartphones.[1]  Since its launch in 2011, it has expanded from a Silicon Valley startup to a business with a valuation of $68 billion and has transformed the taxi industry.[2]  Unfortunately, the “global juggernaut has finally met its match,” says Politico.[3]  On December 20th, 2017, the European Union’s (“EU”) highest court, the Court of Justice of the European Union (the “CJEU”) has ruled that Uber is a transport company, not merely a tech platform, citing the “indispensible” link the company creates between drivers and passengers.[4]


The ruling against Uber is based on a complaint brought by professional taxi drivers in Spain that was originally filed in 2014.[5]  The drivers argued that Uber’s activities in Spain amounted to misleading practices and unfair competition because it did not comply with the same rules that applied to existing taxis.[6]  “We must not be misled by labels,” said Montse Balague, a lawyer for the Spanish taxi association.[7]  She added “if there’s a transport service provided, then a company can’t hide behind a thin veil, calling itself a different service.”[8]


A Spanish court referred the case to the CJEU.[9]  In response to the taxi association’s claim, Uber argued that it is a technology platform connecting passengers with independent drivers, not a transportation company subject to the same rules as taxi service.[10]  Rejecting these arguments, Europe’s highest court placed itself on the side of traditional taxis and held that Uber can now be regulated as a transport service at the national level within the EU’s member states.[11]  The CJEU reasoned that because the ride booking company held great sway over how driver used its technology, the company must be categorized as a transportation service.[12]  Further, in the CJEU’s view “the most important part of Uber’s business is the supply of transport – connecting passengers to drivers by their smartphones is secondary,” and “[w]ithout transport services, the business wouldn’t exist,” said Bloomberg.[13]


The CJEU’s decision is a major a blow to Uber’s future expansion plans across the EU.[14]  Further, it represents the first definitive finding that a global taxi company must use only licensed taxi drivers, as well as meet other strict regulations linked to health and safety and background checks on drivers on its digital platform.[15]  Fortunately, the decision does not represent a “knockout punch” for the global taxi company.[16]  “This ruling will not change things in most EU countries where we already operate under transportation law,” Uber said in a statement.[17]


Although the ruling applies only to the European Union, it is likely to be scrutinized by regulators looking more broadly at the gig economy.[18]  Policymakers across the globe have been struggling with how to frame rules for this growing part of the work force.[19]


Now, many in the tech industry believe the ruling would impact the next generations of startups more than Uber itself.[20]  “We regret the judgment effectively threatens the application of harmonized EU rules to other online intermediaries,” said Jakob Kucharczyk, a vice president of competition and EU regulatory policy at the Computer and Communications Industry Association.[21]  “The purpose of those rules is to make sure online innovators scan scalability and competitiveness in the EU, unfettered from undue national restrictions,” he added.[22]  He believes that this ruling represents a “blow to the EU’s ambition of building an integrated digital single market.” [23]


[1] See What is Uber?, Uber, [].

[2] See Julia Fioretti, Uber dealt blow after EU court classifies it as transport service, Reuters (Dec. 20, 2017, 3:52 AM), [].

[3] See Mark Scott, Uber is a Transportation Company, Europe’s Highest Court Rules, Politco, (Dec. 20, 2017, 9:40 AM), [].

[4] See C-434/15, Asociacion Profesional Elite Tax, 2017 ECLI:EU:C:2017:981.

[5] See Liz Alderman, Uber Dealt Setback After European Court Rules It is A Taxi Service, N.Y. Times (Dec. 20, 2017), [].

[6] See Fioretti, supra note 2.

[7] See Scott, supra note 3.

[8] Id.

[9] Ivana Kottasova, Top court: Uber should be regulated like a taxi company, CNN (Dec. 20, 2017, 8:22 AM), [].

[10] See Stephanie Bodoni & Adama Stariano, Uber Loses EU Court Fight as Judges Take Aim at Gig Economy, Bloomberg (Dec. 20, 2017, 9:35 AM), [].

[11] See Press Release, The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport, CJEU Press Release No 136/17 (20 Dec., 2017); Scott, supra note 3.

[12] See Press Release, supra note 11.

[13] See Bodoni & Stariano, supra note 10.

[14] See Scott, supra note 3.

[15] See Bodoni & Stariano, supra note 10.

[16] See Scott, supra note 3.

[17] See Bodoni & Stariano, supra note 10.

[18] See Alderman, supra note 5.

[19] Id.

[20] See Fioretti, supra note 2.

[21] Id.

[22] Id.

[23] Id.

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