AG Opinion: taxi app connecting passengers with taxi drivers is an Information Society service

A service using an electronic app to connect passengers with taxi drivers is an Information Society service under the E-Commerce Directive (2000/31/EC), 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.

In another case about taxi apps, the Advocate General has delivered his opinion in the case of Case C-62/19 Star Taxi App SRL v Unitatea Administrativ Teritoriala Municipiul Bucuresti prin Primar General et Consiliul General al Municipiului Bucuresti.

Background

Star Taxi App was a smartphone application which put potential users of taxi services in touch with taxi drivers. It allowed potential customers to run a search for taxi drivers available for a journey. The customer could then choose a particular driver from the list. The company neither passed bookings to taxi drivers nor set the fare, and customers paid the driver directly.

Bucharest Municipal Council adopted Decision No 626/2017,which extended the scope of the obligation to apply for authorisation for the activity of ‘dispatching’ to cover operators of IT applications. Star Taxi App was fined, and appealed on the basis that its activity was an Information Society service covered by the principle of the exclusion of prior authorisation in the E-Commerce Directive (2000/31/EC).

The Romanian referring court asked the Court of Justice whether such a taxi app constitutes an ‘Information Society service’, and if so, if the Bucharest Municipal Council’s decision was valid under EU law.

The opinion

Advocate General Maciej Szpunar said that the app falls within 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, under EU case-law, there are exceptions to this. For example, where the service provided by electronic means is inherently linked to the provision of another service, which is the primary service and is not provided by electronic means, such as a transport service. That inherent link is characterised by the fact that the provider of the service provided by electronic means controls the essential aspects of the other service, including the selection of the providers of that other service.

In relation to Star Taxi App, the company did not need to recruit taxi drivers and did not exercise control or decisive influence over the conditions under which taxi drivers provided their transport services. Unlike other similar services, such as Uber, the Star Taxi App was an add-on to a pre-existing and organised taxi transport service. Therefore, its role was that of an external provider of an ancillary service, which was important, but not essential, for the efficiency of the primary transport service.

The Advocate General went on to consider Bucharest Municipal Council’s decision under EU law. The E-Commerce Directive prevents member states from making the taking up and pursuit of the provision of Information Society services subject to prior authorisation or any other requirement having equivalent effect. However, that prohibition does not affect authorisation schemes which are not specifically and exclusively targeted at Information Society services, as was the case here.

However that is subject to the condition that the services covered by the existing authorisation scheme which are not provided by electronic means and the Information Society services to which that scheme is extended are actually equivalent in economic terms.

The Services Directive 2006/123/EC allows member states to make access to a service activity subject to such a scheme, but 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 Advocate General said that the national court must decide if there are overriding public interest reasons justifying the authorisation scheme for taxi dispatching services, although this does not apply when the authorisation is subject to requirements that are technologically unsuited to the applicant’s intended service. 

The Advocate General concluded that:

  • A service to put taxi passengers in touch with taxi drivers via an electronic application constitutes an Information Society service where that service is not inherently linked to the taxi transport service so that it does not form an integral part of the taxi transport service.
  • The E-Commerce Directive does not prevent an authorisation scheme being applied to Information Society service which normally applies to providers of economically equivalent services that are not Information Society services.
  • The Services Directive does not permit the application of such an authorisation scheme unless the scheme complies with the Directive, which is a matter for the national court to determine.

Published: 2020-09-17T12:00:00

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