The European Union's top court ruled today that Uber will be classified as a transport service, meaning it will be regulated like other taxi operators. The ruling rejects Uber Technologies Inc.'s claim that it should instead be classified as a digital service provider. The decision can potentially impact other digital businesses in Europe such as AirBnb.
Uber has previously tried to present itself as a strictly digital service provider connecting independent drivers to passengers through its platform. The court decision clarifies that connecting passengers through digital platforms is secondary to Uber's primary business of supplying transport services and should therefore be regulated by transport authorities. The court case will no doubt send ripples throughout the technology industry as it sets a precedent for imposing regulation on the "gig-economy." The gig-economy is an environment where freelancers sell their short term services through digital applications on PCs and smartphones. Jacob Kucharzyk, from the Computer & Communications Industry Association, voiced concerns that today's ruling is "a blow to the EU's ambition of building an integrated digital single market."
Uber was launched in 2011 and operates in over 600 cities globally. An Uber spokeswoman responded in a statement saying "This ruling will not change things in most EU countries where we already operate under transportation law."
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