In Landmark Ruling, EU's Top Court Says Uber Is A Transport Service
RAY SUAREZ, HOST:
Europe's top court has delivered a big blow to Uber. The Court of Justice says the ride hailing company is in the business of transportation, so it's subject to regulations just like taxis. NPR's Aarti Shahani joins us now to talk about the decision. Aarti, Uber has been the focus of a lot of litigation around the country and around the world. Break this case down.
AARTI SHAHANI, BYLINE: It has. And in this case, like many others, there is an argument over legal categories, OK? Does some old category apply to this new, innovative startup? Here we're talking about the category of transportation. Is Uber a transport company? That's what the European Union was litigating since 2014. Now, it might sound like a no-brainer to you because Uber moves people from point A to point B, so of course they transport. But on paper, the company's lawyers argued Uber is an e-commerce company, more like an Amazon.com than a taxi, and it's not subject to transport regulations.
Today, the Court of Justice ruled that is not true. Uber is more than an intermediary that connects a non-professional driver to passenger by smartphone. Uber's core business is providing the journey. And the company exercises what the court calls decisive influence over how the driver performs his or her work, you know, by setting prices, by rating them and quality control. This ruling is not subject to appeal. It's final. The Barcelona-based group that brought on the litigation, Elite Taxi - they tweeted out today the taxi drivers have beat Goliath.
SUAREZ: OK, David beat Goliath. What does this mean for how Uber operates in Europe?
SHAHANI: Well, you know, in terms of practical changes, it doesn't mean a whole lot. Uber entered the European market much like it entered the U.S. market, claiming that it's an online platform, not a taxi or car service. In the U.S., that matter's pretty much been settled. Most states have decided Uber, as well as its competitor Lyft - they're both legally transportation network companies, so they've got regulations like background checks, making sure cars have insurance. Some states require video training for drivers. Some require placards on the front of windshields.
Over in Europe, many countries, like France and Italy, had made similar moves. They decided Uber is in the transport business. According to an Uber spokesperson who I had spoken with today, the vast majority of the Europe business is already complying with the rules as such. So this ruling - it really only changes the day-to-day operations in a few small countries - Poland, Romania, the Czech Republic and Slovakia. There, Uber will likely have to begin complying with the rules or pull out.
SUAREZ: If you are contemplating a lawsuit somewhere else in the world, does this ruling constitute a challenge to how Uber does business?
SHAHANI: Well, it's not binding in other jurisdictions. But I think that what's significant about it is that it's a strong signal that the tide is turning, OK? You know, when you think about it, Uber is as much about legal engineering as it is about engineering. Programmers write code, and an army of lawyers try to figure out how to skirt laws to cut costs. And Europe is saying in no uncertain terms, no, Uber, you cannot keep doing that. There's clear distrust and skepticism that wasn't there when the company first came out.
And it's very much in line with how Europe is treating American tech companies in general, scrutinizing their efforts to sidestep regulations on speech or antitrust rules. So the next thing that I'm really looking for is, how are courts going to move on another legal category, which is the question of employee status. Are drivers employees or independent contractors?
SUAREZ: That's NPR's Aarti Shahani. Aarti, thanks.
SHAHANI: Thank you. Transcript provided by NPR, Copyright NPR.