CJEU rules taxi app can be an information society service

December 8, 2020

The Court of Justice of the European Union has ruled in Case C-62/19 Star Taxi App SRL v Unitatea Administrativ Teritoriala Municipiul Bucuresti prin Primar General and Consiliul General al Municipiului Bucuresti that a service that puts taxi passengers directly in touch with taxi drivers via an app is an information society service if it does not form an integral part of an overall service the principal component of which is the provision of transport.

Star Taxi App SR is a Romanian company which operates a smartphone app putting taxi service users directly in touch with taxi drivers. Star Taxi App does not forward bookings to taxi drivers and does not set the fare, which is paid directly to the driver at the end of the journey. The Bucharest authorities adopted Decision No 626/2017 in December 2017, which extended an obligation to obtain prior authorisation for the activity of ‘dispatching’ to cover operators of IT applications such as Star Taxi App. Star Taxi App was fined for having infringed that legislation.

Star Taxi believed that its activity is an information society service for which it does not need prior authorisation under E-Commerce Directive 2001/31/EC. It brought court proceedings to have the Decision annulled, and the Romanian court referred the case to the CJEU. It asked if the service was an information society service and if so, did the Decision comply with EU law?

In September 2020, the Advocate General delivered an opinion saying that a service using an electronic app to connect passengers with taxi drivers is an Information Society service under the E-Commerce Directive, as long as the app is not be inherently linked to the taxi transport service so that it does not form an integral part of it.

The Court’s decision

The Court noted that the service offered by Star Taxi App falls under the definition of ‘information society service’ in the E-Commerce Directive because it is provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services. 

However, having considered the case law, the Court said that a service might not be regarded as falling within the concept of ‘information society service’ if it is an intermediary service forming an integral part of an overall service, the principal component of which is a service coming under another legal classification.

The Court noted that Star Taxi’s app was an add-on to a pre-existing organised taxi transport service. It did not select the taxi drivers, set and collect the fare for the journey or have control over the quality of the vehicles and their drivers or the drivers’ behaviour. It followed that the service could not be regarded as forming an integral part of an overall service, the principal component of which is the provision of transport.

The court then assessed whether the Decision complied with EU law. It first considered if it was a technical regulation. Directive 2015/15354 provides that member states must communicate immediately to the Commission any draft ‘technical regulation’. National legislation affecting an ‘information society service’ is classified as a ‘technical regulation’ if it is specifically aimed at information society services and is obligatory, among other things, for the provision or use of the service concerned in a member state or a large part of a member state.

Because the Romanian legislation made no mention of information society services and applied to all kinds of ‘dispatching’ service without distinction, however provided (ie by telephone or app), the Court considered that it was not a ‘technical regulation’ and so the obligation to communicate draft ‘technical regulations’ to the Commission before their adoption did not apply.

The E-Commerce Directive prevents member states from making access to or the exercise of an activity consisting of the provision of ‘information society services’ subject to a prior authorisation scheme or any other requirement having equivalent effect.

However, that prohibition does not concern authorisation schemes which do not specifically and exclusively target ‘information society services’, such as the Romanian Decision. The Services Directive (2006/123/EU) allows member states to make access to a service activity subject to such a scheme if certain conditions are met. Those conditions are: the scheme must not be discriminatory; it must be justified by an overriding reason relating to the public interest; and there must not be less restrictive measures capable of achieving the same objective.

The Court said it was for the Romanian court to decide if there were overriding reasons relating to the public interest justifying the authorisation scheme for taxi ‘dispatching’ services. However, an authorisation scheme is not based on criteria justified by an overriding reason relating to the public interest when the grant of authorisation is subject to requirements that are technologically unsuited to the service concerned.