Uber has been on an incredible losing streak over the past year; granted much of its troubles have been at its own hands with scandal after scandal. The most recent of those scandals started with an ex-employee who sent a letter detailing all the hacking and bribery that Uber has allegedly engaged in over the years. The latest setback came as the European Union's highest court ruled that Uber is a taxi service. That means that Uber will now have to comply with tougher rules within the European Union that govern taxi associations.
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The ruling was handed down by the European Court of Justice, the highest court in the Union, and the ruling made it clear that Uber is a transportation company rather than an online platform. Forcing adherence to the rules governing taxi services means that Uber will be forced to pay licensing fees and employee benefits. The ruling means that drivers for Uber will have to be treated like taxi chauffeurs rather than independent contractors only tied to the company via the smartphone app that tells them where to go.
"It’s normal that authorities don’t know what to do — they can’t just issue regulations anytime somebody claims to operate a new business model," said Valerio De Stefano, a law professor at the University of Leuven in Belgium. "The litigation will lead authorities to better understand what is the reality of the work in the platform economy."
This case began when a taxi group form Barcelona, Spain filed a complaint. That group felt that it was unfair that Uber didn’t have to adhere to the same rules the taxi company followed when working in the city. The court determined in its decision that Uber's drivers only connected to the company via a smartphone for payment "must be regarded as being inherently linked to a transport service."
With the ruling handed down, all 28 member countries of the E.U. will now have to regulate "the conditions under which such services are to be provided." Uber for its part says that it already operates under the transportation law of most cities and that the ruling would only have a minor impact on its operations.