The top EU court ruled that the bloc’s member states can regulate Uber like a taxi company, dealing a major setback to the mobile ride-hailing app’s expansion plans in Europe.
The European Court of Justice said on Wednesday that Uber cannot claim the freedoms provided under EU law for digital services. Instead, its operations fall within the field of transportation, which is governed by national laws in the bloc.
“The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport,” the court said. “Member states can therefore regulate the conditions for providing that service.”
This means that EU countries may require drivers to obtain licences and authorizations, like the taxi industry.
The issue is contentious because such requirements have been used by some EU governments, such as Germany, Hungary and Denmark, in the past to effectively shut down the car-sharing service.
However, Uber said the decision won’t have a major impact on its European operations.
“This ruling will not change things in most EU countries where we already operate under transportation law,” a spokesperson for Uber said. “It is appropriate to regulate services such as Uber, and so we will continue the dialogue with cities across Europe.”
The case was referred to the EU court by Spain, where a professional association of taxi drivers in Barcelona took Uber to court for engaging in unfair competition because neither Uber nor its drivers had the necessary authorizations required to operate.
Uber argued that it was a digital service connecting consumers to drivers and as such could enjoy vast freedoms under EU law.
However, the court said that Uber was more than just an intermediary between drivers and passengers, and that the main component of the app was to provide transport services.