Uber suffers fresh blow as European court suggests company should face tougher restrictions

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Uber’s expansion plans were dealt a major blow on Thursday, after a senior legal adviser to the European Union's top court said that the ride-sharing company provides a transport service and is not merely a digital enabler as Uber had argued, meaning that it must be licenced in order to operate.

Although the counsel, put forward by Advocate General Maciej Szpunar to the European Court of Justice (ECJ) is non-binding, the court’s judges usually follow it.

If the recommendation is imposed by the ECJ in their final ruling later this year, it would mean that Uber would be subject to tighter regulations across Europe. By contrast, if the court rules in Uber’s favour, it would be able to operate more freely as EU law dictates that digital services cannot be unnecessarily constrained by local authorities.

“Uber cannot be regarded as a mere intermediary between drivers and passengers,” wrote Mr Szpunar.

“Drivers who work on the Uber platform do not pursue an autonomous activity that is independent of the platform. On the contrary, that activity exists solely because of the platform, without which it would have no sense.”

Mr Szpunar also said that the company exerted considerable control over its drivers as well as the “economically important aspects” of its transport service.

Uber said in a statement that being considered a transportation company “would not change the way we are regulated in most EU countries as that is already the situation today. It will, however, undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button”.

Mr Szpunar’s statement is the latest in a series of recent setbacks for the company, which has faced legal battles and questions over the actions of chief executive Travis Kalanick.

Uber says around 120,000 drivers in the EU use Uber, and around 7.5 million people. In the UK, Uber is licensed in the same way as other private hire vehicle firms, but has been forced to abandon or change its services in other European cities. Last year the company returned to Berlin and Madrid as a licensed service.

The current ECJ case originates from a complaint brought in 2014 by a taxi group based in Barcelona, that said that Uber constituted unfair competition because it did not have to comply with the same rules while operating.