A Big Piece of Uber News

Uber Technologies Inc. will appear in the European Court of Justice on Tuesday to defend its business practices, in what is fast becoming the Groundhog Day of Uber news stories.

The U.S.-based ride sharing app has faced these accusations again and again. Critics argue that it not a technology platform, but a transport company. More to the point, they say that Uber gets an unfair advantage over traditional taxis by using this sleight of hand.

Local taxi companies and their allies in municipal governments are working to either ban or cripple ride sharing apps. (Source: “Uber is going to Europe’s top court in a fight that could have huge implications for the app economy,” Business Insider, November 28, 2016.)

This particular case started in Spain. Barcelona’s main taxi operator filed charges saying that Uber was running an illegal taxi service, but the judge was unsure how to rule. The Spanish court kicked the case up the chain to a higher authority: the European Court of Justice.




That’s where we are with today’s Uber news. If the case goes against Uber, it could cripple its business across the entire continent. Moreover, it would provide a roadmap for similar litigation being carried out in other jurisdictions.

Similar allegations have been made in court, before labor boards, and even to federal governments. In almost of these cases, the core issue is the same: does Uber have the right to call itself a technology company, or is it actually a transport company?

The company certainly thinks it knows the answer. By its accounting, all it does is link drivers to passengers. Customers open the “Uber” app and plug in their destination. Uber drivers in the area can see the request, and choose whether to accept. They ferry the passengers from point A to B, and that’s it.

Uber settles the payment automatically.

To supporters, this looks a lot like a technology platform. A vast majority of the company’s payroll is devoted to software engineers that designed and maintain this platform, a fact which should, in theory, support the argument that it’s a technology company.

However, critics would counter that not classifying drivers as full-time employees is part of the problem. By having standards of maintenance for their cars and a dress code for drivers, Uber is acting like a traditional transport employer, say the critics.

Fifteen judges will hear the arguments from more than 200 participants, including positive testimony from the Netherlands, Finland, Poland, Greece, and the European Free Trade Association. Their decision will most likely appear in March 2017.