"This ruling will not change things in most EU countries where we already operate under transportation law," an Uber spokesperson said in an email shortly after the decision

Uber is a transportation company, according to a landmark ruling from Europe's highest court. The European Court of Justice (ECJ) ruled Wednesday that the U.S. ride-hailing app is a transportation firm and not a digital company. The verdict is a long-awaited judgment expected to have major implications for how Uber is regulated throughout Europe.



"The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport," the ECJ said. "Member states can therefore regulate the conditions for providing that service," it added. Uber has long-considered itself an "information society service" which connects drivers and passengers through inter-mediation via their app. This subtle classification has helped to protect the multi-billion dollar start-up from national regulations and means it has been treated as a digital service operating across borders in the EU's single market. However, several European governments have argued the U.S. company should be considered a taxi firm, and just like thousands of others, it should have to comply with European transport laws.



"This ruling will not change things in most EU countries where we already operate under transportation law. However, millions of Europeans are still prevented from using apps like ours," an Uber spokesperson said in an email shortly after the decision. The ECJ's decision means Uber now faces national regulation in up to 28 member states, forcing it to deal more closely with local governments that set transportation rules and licensing requirements. This particular case cannot be appealed, according to Reuters, but it can pursue legal challenges in other courts.

A phone displays the Uber ride-hailing app on September 22, 2017 in London, England. Uber is appealing Transport for London's decision not to renew its operating license. Leon Neal | Getty Images

How did we get here?

In 2014, a group called Elite Taxi in Barcelona asked a court in the city to impose penalties on Uber's operations in the country. The association claimed that Uber was engaging in unfair competition towards Elite Taxi's drivers, particularly with its UberPop service, which allowed non-licensed drivers to pick up passengers via the app. The case was escalated eventually to the European Union's highest court — the ECJ — for advice. Advocate General Maciej Szpunar said in May that, in his opinion, Uber is not an "information society service." To be considered such would mean the part of the service which is not made by electronic means is "economically independent" of the service. In Uber's case, the drivers would need to be "economically independent". Another factor to be considered is whether Uber provides the entire offering. For example, an online retailer has a website or app as well as shipping the goods it sells. In Uber's case, this would mean it essentially employs the drivers. Uber has said that its drivers do not work for the company and are independent.

The ECJ advisor said that Uber does not meet either of these two conditions and is therefore a transportation company.



The Computer & Communications Industry Association (CCIA), of which Uber is a member, said in a statement that the ECJ's ruling "effectively threatens the application of harmonized EU rules to online intermediaries."



"After today's judgment innovators will increasingly be subject to divergent national and sectoral rules. This is a blow to the EU's ambition of building an integrated digital single market," said Jakob Kucharczyk, vice president for competition and EU regulatory policy at the lobby group.

Pedestrians walk past the Uber Technologies headquarters building in San Francisco. David Paul Morris | Bloomberg | Getty Images

Uber's European challenges