The San Francisco-based ride-sharing company could lose its fight in the European Union against being regulated as a traditional taxi service, but appears to be driving ahead in new business areas, such as freight transportation.
Source: Mr.Whiskey / Shutterstock.com
An EU court has rejected the argument that Uber is simply an app that connects drivers to passengers, meaning it could face a greater regulatory burden as a transportation provider.
Uber Technolgoies Inc. suffered a legal setback in the European Union in its fight against being regulated as a traditional taxi service.
EU Court of Justice Advocate General Maciej Szpunar on Thursday rejected the argument that Uber is simply an app that connects drivers to passengers, noting how the company is also in fact a transportation service. Taxi drivers across Europe have said Uber tries to unfairly avoid regulations that bind established competitors.
“The Uber electronic platform, whilst innovative, falls within the field of transport,” Szpunar said. “Uber can thus be required to obtain the necessary licenses and authorizations under national law.”
Szpunar’s non-binding opinion is an indication that Uber might not be able to shake off national restrictions, such as the requirement to get a license or other authorizations, according to a report from Bloomberg.
The EU court’s decision, which is expected in a few months, will be binding and cannot be appealed.
Bruegel Economist Georgios Petropoulos said the final ruling could also impact the labor battles Uber is facing on whether its drivers should be classified as employees or independent contractors, Bloomberg said.
In addition, the decision could play against Uber in the United Kingdom, where it could be liable to pay value-added tax (VAT) as a transport service provider, Bloomberg said. If Uber is classified as a transport service provider, then it may have to charge a 20 percent VAT on fares.
San Francisco-based Uber originally started in 2009 as a luxury black car service, but has operated as a pure peer-to-peer ride sharing business since 2012, and now even provides a food delivery service, dubbed UberEATS.
And in 2016, Uber CEO Travis Kalanick told Business Insider in an interview the company is definitely “getting in the trucking business.”
“It is a challenging, interesting, nuanced business, and it is going to be intense getting into it, but that’s exciting to me,” Kalanick said.
Uber bought autonomous trucking start-up Otto for $650 million last summer, and in October, Otto and Budweiser completed the world’s first shipment by a self-driving truck.
Uber’s purchase of Otto was expected to help give rise to Uber’s long-haul trucking business, Uber Freight, the Commercial Carrier Journal explained.
Initially, Uber Freight was intended to mirror the functionality of Uber’s app, connecting a shipper with a carrier, thus eliminating the need for brokers, but on Sunday, Kalanick posted a tweet that suggested the company could be using its own trucks and/or trailers in some capacity.
With a picture of a tractor trailer with “Uber Freight” written across it, Kalanick tweeted, “So much great stuff going on!”