CJEU Judgment: Uber is a Transport Service

The Court of Justice of the European Union has ruled that the Uber business model is that of a transport service not an information society service

In Case C-434/15 Asociación Profesional Elite Taxi v Uber Systems Spain SL the CJEU had to consider a claim against Uber Systems Spain from taxi drivers in which it was alleged that Uber engaged in misleading practices and acts of unfair competition. The Spanish court had referred the question of whether the services provided by Uber are to be regarded as transport services, information society services or a combination of both. The extent to which Uber’s drivers had to meet licensing and related requirements turned on that question. The Court held that the intermediation system of Uber is not a game-changer and the activities of the non-professional drivers using Uber to connect with potential passengers amount to a service in the field of transport.

Facts

The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport Member States can therefore regulate the conditions for providing that service The electronic platform Uber provides, by means of a smartphone application, a paid service consisting of connecting non-professional drivers using their own vehicle with persons who wish to make urban journeys. In 2014, a professional taxi drivers’ association in Barcelona (Spain) brought an action before the Juzgado de lo Mercantil No 3 de Barcelona (Commercial Court No 3, Barcelona, Spain) seeking a declaration from that court that the activities of Uber Systems Spain, a company related to Uber Technologies (together ‘Uber’), amount to misleading practices and acts of unfair competition. Neither Uber Systems Spain nor the non-professional drivers of the vehicles concerned hold the licences and authorisations required under the Regulation on taxi services in the metropolitan area of Barcelona. In order to determine whether the practices of Uber can be classified as unfair practices that infringe the Spanish rules on competition, the Juzgado de lo Mercantil No 3 de Barcelona considers it necessary to ascertain whether or not Uber requires prior administrative authorisation. To that end, the court considers that it should be determined whether the services provided by Uber are to be regarded as transport services, information society services or a combination of both. Indeed, whether or not prior administrative authorisation may be required depends on the classification adopted. In particular, if the service at issue were covered by the directive on services in the internal market or the directive on electronic commerce , Uber’s practices could not be regarded as unfair practices.

Judgement

The CJEU declares that an intermediation service such as that at issue in the main proceedings, the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of EU law. Consequently, such a service must be excluded from the scope of the freedom to provide services in general as well as the directive on services in the internal market and the directive on electronic commerce. It follows that, as EU law currently stands, it is for the Member States to regulate the conditions under which such services are to be provided in conformity with the general rules of the Treaty on the Functioning of the EU.

The Court takes the view, first of all, that the service provided by Uber is more than an intermediation service consisting of connecting, by means of a smartphone application, a non-professional driver using his or her own vehicle with a person who wishes to make an urban journey. Indeed, in this situation, the provider of that intermediation service simultaneously offers urban transport services, which it renders accessible, in particular, through software tools and whose general operation it organises for the benefit of persons who wish to accept that offer in order to make an urban journey. The Court notes in that regard that the application provided by Uber is indispensable for both the drivers and the persons who wish to make an urban journey. It also points out that Uber exercises decisive influence over the conditions under which the drivers provide their service.

Therefore, the Court finds that that intermediation service must be regarded as forming an integral part of an overall service whose main component is a transport service and, accordingly, must be classified not as ‘an information society service’ but as ‘a service in the field of transport’.

The Court states that, consequently, the directive on electronic commerce does not apply to that service, which is also excluded from the scope of the directive on services in the internal market. For the same reason, the service in question is covered not by the freedom to provide services in general but by the common transport policy. However, non-public urban transport services and services that are inherently linked to those services, such as the intermediation service provided by Uber, has not given rise to the adoption of measures based on that policy.

Published: 2017-12-20T09:50:00

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