Following taxi associations’ protests and legal action, Uber services have been restricted in, among other countries, Belgium, France, Germany and Italy.
In some of these countries, courts have ruled that Uber operates as a transport company and that it is in breach of local regulations governing professional taxi drivers' activities. France even adopted, in 2014, a section in its transport law which included a ban on Uber services. Despite Uber contesting the constitutionality of the law, arguing that it was unfairly broad and that it limited competition, the claim was rejected on 22 September 2015 by the French Constitutional Court. On 24 September, the Brussels Court of Commerce ordered a ban on Uber services, giving it 21 days to close operations in Brussels or else be fined EUR 10,000 per ride.
The highly controversial services offered by the Californian company have recently reached EU institutions, with the Commission confirming on 1 September that it is launching a study analysing the markets for taxis in Member States, in a bid to resolve ongoing disputes with new business models like Uber.
The Commission is not the only EU institution concerned, since the final ruling regarding the services offered by Uber will most likely be issued next year by the European Court of Justice.
In 2014, when Uber decided to introduce its technology in Spain, Barcelona’s licensed taxi drivers association – the Asociación Profesional Élite Taxi – sued Uber and asked the judge to declare that Uber Systems was in breach of Spanish unfair competition law.
Uber opposed this by stating that it does not provide a transport service. Instead, it admits running a mobile application which allows consumers with smartphones to submit a trip request which is then routed to drivers who use their own cars. Consequently, Uber is arguing that it provides information society services protected by the EU principle of freedom of establishment, and hence does not need an ‘authorization’ to run the business.
That interpretation of EU law is rejected by Barcelona’s licensed taxi drivers. They claim that Uber is providing a transport service and by doing so without prior authorization, Uber engages in acts of unfair competition under Spanish law.
Before taking its position, the Spanish court considered it necessary to determine whether or not Uber services require prior authorization. The authorization depends on the nature of services which are carried out. Are Uber services transportation services, information society services or a combination of both?
In its decision of 16 July 2015, the Court of Barcelona decided the solution should come from the European Court of Justice and decided to ask four questions.
The first one relates to the qualification of the services provided by Uber. Are these “mere transport activities” or “an electronic intermediation” or “information society services”?
The second question relates to the principle of freedom to provide services under EU law. If Uber services can be qualified partially as “information society services”, should it benefit from the principle guaranteed by Article 56 TFEU and Directive 2006/123/EC and Directive 2000/31/EC?
The third question is whether Uber’s alleged breach of Spain’s unfair competition law is contrary to Article 9 of Directive 2006/123/EC, which governs ‘authorization schemes’ and which states that an authorization, licensing or permits regime cannot be restrictive or disproportionate, and cannot unreasonably hinder the principle of freedom of establishment.
Finally the Spanish Court asks, if Uber is to be considered as an information society service, whether the restrictions Spain is currently imposing on Uber (which is incorporated in the Netherlands) are allowed, taking into account the freedom to provide information society services expressed by Article 3 of Directive 2000/31/EC.
The European Court of Justice moves slowly. It now requires a translation of the question in all official languages of the European Union and for these to be sent to the 28 EU Member States, allowing them to file written submissions. A decision is not expected before autumn 2016. So it will be some time before we know whether or not Uber has got its way and see what effect it will have on the way business is conducted within the EU.