The ECJ rules that Uber shall be classified as a service in the field of transport and not an information society service

21 December 2017

Alexander Benalal, Covadonga Maestro

The European Court of Justice (ECJ) ruled on December 20th that Uber's service consisting of connecting, by means of an app, a non-professional driver using his or her own vehicle with a person who wishes to use a Uber vehicle, shall be considered a transport service and not an information society service according Services Directive (Directive 2006/123/EC) and Ecommerce Directive (Directive 2000/31/EC).

On 29 October 2014, the Elite Taxi Professional Association brought an action before the Commercial Court No 3 of Barcelona claiming that the activities of Uber infringed the Spanish legislation as they were based on misleading practices and acts of unfair competition within the meaning of the Spanish Unfair Competition Act (Law No 3/1991). The Commercial Court noted that, as Uber offered a service linked to an international platform which has implications on European Union Law, the assessment at EU level would be more appropriate and therefore the Commercial Court decided to stay the proceedings and refer four specific questions to the Court of Justice for a preliminary ruling.

As the ECJ stated, the intermediation service provided by Uber is based on the selection of non-professional drivers using their own vehicle, to whom the company provides an application without which (i) those drivers would not be led to provide transport services and (ii) persons who wish to make an urban journey would not use the services provided by those drivers. In addition, Uber exercises decisive influence over the conditions under which that service is provided by those drivers.

In light of the above, the ECJ found that Uber's intermediation service and the service offered by the non-professional drivers through the Uber smartphone app are, in principle separate services. The transport service depends on the intermediation service as without Uber's intermediation no service could be provided and the people willing to travel will have no means to contact with these drivers.

Consequently, the ECJ ruled that even though Uber offers an information society service, understood as "any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of service", the main element of this service was the provision of transport services and thus Uber services must be regarded as being inherently linked to transport services and, accordingly, must be classified as a service in the field of transport within the meaning of EU law.

The consequences of Uber's classification as a transport service are very important due to the fact that, according to the Services Directive, the transport sector is excluded from the freedom to provide services, so from now Member States are able to limit the conditions under which such services are to be provided.

This ruling does not only apply to Spain, but also to all Member States so it is a crucial judgement due to the fact that it means that Uber could face now some restrictions to the provision of its services due to its exclusion of the freedom of the services in the Member States where it operates or is willing to operate.

Will these potential limitations affect citizens' rights related to the collaborative economy and to the means of transport in a hyperconnected world?

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