Uber Loses EU Court Fight as Judges Take Aim at Gig Economy

Above all Technologies Inc. is going to be regulated in European Union countries as being a transport company after the bloc’ h top court rejected its claims to be a digital service provider, a decision which could increase legal risks for various other gig-economy companies including Airbnb.

While the EU Court of Justice’ s ruling covered UberPop — which used drivers without taxi cab licenses and has already been shuttered in lots of countries due to the legal issues — it’ s a real blow as the initial definitive finding that Uber must be controlled by transport authorities.

Your decision clarifies for the first time that connecting individuals via an app to non-professional drivers forms an integral part of a transportation service. It rejects Uber’ ersus view that such services are usually purely digital and could fuel additional scrutiny of other gig-economy companies. Paris regulators are already clamping upon Airbnb, treating the home-rental support more like a hotel, and Uk food-delivery start-up Deliveroo is in the particular spotlight for its treatment of workers.

Read More: In case Uber Is a Taxi Firm, Airbnb Looks a Lot Like a Hilton: Gadfly

In the EU judges’ view, “ the most important part of Uber’ s business is the supply of transportation — connecting passengers to motorists by their smartphones is secondary, ” said  Rachel Farr, senior work lawyer at law firm Taylor Wessing . “ Without transport solutions, the business wouldn’ t exist. ”

Uber has contended that it’ s a technologies platform connecting passengers with 3rd party drivers, not a transportation company susceptible to the same rules as taxi solutions. The case has been closely watched by technology industry because of its precedent designed for regulating the gig economy, exactly where freelancers make money by plying from spare rooms to fast-food transport via apps on smartphones plus PCs.

“ Right after today’ s judgment innovators can increasingly be subject to divergent nationwide and sectoral rules, ”   said Jakob Kucharczyk, of the Pc & Communications Industry Association, which usually speaks for companies like Above all, Amazon. com Inc. , Search engines and Facebook Inc. “ This is a blow to the EU’ s ambition of building an integrated electronic single market. ”

While the ruling is valid EU-wide, it remains limited to Uber’ t services and won’ t straight affect other disputes Uber is certainly facing over how its motorists are treated. One such case is usually pending at the Oughout. K. court of appeal.

“ This particular ruling will not change things in many EU countries where we currently operate under transportation law, ” Uber said in a statement. “ However , millions of Europeans are still avoided from using apps like ours. ”

Wednesday’ s situation centered around UberPop, an inexpensive ride-hailing service in several European cities that will allowed drivers without a taxi permit to use their own cars to pick up people. Legal challenges have forced Above all to shutter UberPop in most main European countries in favor of UberX, which needs drivers to get a license.

Read More: Big Tech’ s Bad Week in European countries Signals More Problems in 2018

Europe can be taking a stricter approach to regulating United states tech giants. German regulators recently accused Facebook of violating antitrust laws by using data it gathers on users, while France’ ersus top privacy regulator told WhatsApp to stop sharing user data in the app with Facebook, which purchased the messaging service in 2014. The European Commission has also targeted Google , Apple and Amazon more than their business practices and taxes affairs.

The judgment adds to the challenges facing Uber TOP DOG Dara Khosrowshahi, who wants to take the business public by 2019. Since becoming a member of in August, Khosrowshahi has experienced a boardroom battle with Uber co-founder Travis Kalanick, a headline-grabbing suit alleging the company stole autonomous vehicle technology from Alphabet Inc. ’ s Waymo, various authorities investigations, the threat of dropping its taxi license in its greatest European market of London, plus revamping a company culture considered unwelcoming for women, among other controversies.

Meanwhile, the company continues to generate losses and faces a growing roster associated with well-funded rivals, from Lyft within the U. S., to China’ t Didi  Chuxing in Asia.  

The case is: C-434/15, Asociacion Profesional Elite Taxi.