EU court advises challenge to Uber business model

Uber provides a transport service and must be licensed, an adviser to the European Union’s top court said on Thursday, in a potential blow to the U.S. firm which says it is merely a digital enabler. Harvey Biggs reports

(REUTERS / UBER) – The EU’s top court has applied the brakes to Uber’s ambitions in Europe ..

reccomending the U.S firm provides a transport service and must be licensed.

It’s a blow for the ride-sharing company, which claims it is merely a “digital enabler” – allowing it to bypass strict local licensing and safety rules.

Though a non-binding opinion, the determination by the Court of Justice is followed by its judges in most cases and a ruling can thus require Uber to obtain local licensing and authorisations.

The case was brought by an association of Barcelona taxi drivers – the latest group to take Uber to court since the company expanded into Europe five years ago – arguing it has created an unfair market.

Reuters Transport Correspondent Julia Fioretti says the ruling is unlikely to change how the company operates.

“Consumers will be affected because launching peer-to-peer car-sharing services such as UberPOP will be… could be made harder, if a final ruling comes down, and it could… Uber X, which is the licensed service, could be a little bit more expensive as a result of added regulations and safety requirements, and so yes we could see Uber X slightly hampered in its expansion and therefore less availability for consumers.”

In a statement, Uber said it would await the final ruling later this year, but added it wouldn’t change how it is already regulated in most EU countries.

But warned such a ruling would “undermine the much needed reform of outdated laws which prevent millions of Europeans from access a reliable ride at the tap of a button”.

Once again, showing that this rapidly growing company has no intention of being knocked out of the fast lane.