BRUSSELS/FRANKFURT An adviser to the European Union's top court said ride-hailing app Uber [UBER.UL] should be considered a transport service on Thursday, potentially exposing it to more local licensing regulations.
IS THE ADVISER'S OPINION LIKELY TO BE ADOPTED?
The opinion from the Advocate General at the Court of Justice of the European Union (ECJ) is non-binding, although judges tend to follow such opinions in most cases. A final ruling is expected in the coming months.
WHAT IS A TRANSPORT SERVICE?
The ECJ was asked whether Uber, which allows passengers to summon a ride through a smartphone app, should be considered as a less regulated "information society service" or a transportation service, which is subject to local rules.
Being considered an information service means treating Uber simply as a market maker, similar a hotel or airline booking service, by connecting drivers to passengers.
As an information service, Uber would be able to benefit from the principle of the freedom to provide services - giving it strong protection against local regulations under EU law.
However, transport services are excluded from that protection, and member states are free to regulate them as they please.
If the opinion is upheld by the court, it could force Uber to comply with myriad local transportation regulations – some dating back as much as a century – meaning it must take more responsibility for certifying, insuring and paying its drivers, as traditional taxi firms now do.
WHAT WILL CHANGE IF THE ECJ FOLLOWS THE OPINION?
Uber said being considered a transport services would not change the way it is regulated in most EU countries as it already complies with local regulations.
Indeed, in its major markets Uber operates a licensed service and any ruling will likely not force it to trim its services.
It may, however, have an impact in EU countries where Uber still operates its unlicensed service UberPOP, namely Estonia, Poland, Czech Republic and Finland, should UberPOP be challenged there.
A final ruling saying that Uber should be considered a transport service also closes off one of Uber's best hopes for EU-wide regulatory relief.
HOW FAR-REACHING IS THIS OPINION?
The advisory opinion set aside issues around the employee status of drivers and competition issues involving Uber as a platform.
It said that Uber "certainly cannot be considered a carpooling platform" because drivers accept payment over and above the cost of providing transport.
And it said that whether or not Uber was a part of the sharing economy makes no difference under the relevant law. The European Commission has been broadly supportive of the sharing economy and said last year governments should only ban services like Uber and Airbnb as a last resort.
(Editing by Alexander Smith)