A small fine on a ride-hailing app in Bucharest is set to have big consequences for similar services across Europe.
On Thursday, the EU’s top court ruled that ride-hailing apps that put passengers directly in touch with taxi drivers — and do not provide a crucial part of the transport service — are online platforms.
The ruling from the Court of Justice of the European Union amounts to a victory for ride-hailing apps, namely Uber, which have so far been regulated as taxi companies. It opens an opportunity for them to seek greater freedom from regulation in the EU, if they can prove they are platforms.
The case on which the EU judges based their decision pitted Romanian company Star Taxi against Bucharest’s municipal court. In 2017 the court fined Star Taxi 4,500 Romanian lei (approximately €929) for failing to apply for a dispatching license.
The company protested, arguing that it was an internet service provider and not a taxi company. Star Taxi allows customers to choose their drivers from a list and does not forward bookings or — unlike Uber — set the fare.
The EU court agreed with Star Taxi’s argument, saying its service is not an “integral” part of the taxi transport service.
The ruling could upend the way ride-hailing apps are regulated.
In a 2017 case, the EU court found that Uber’s now-defunct Uber Pop service was a transportation company, forcing it and others to abide by national transport laws. This made it harder for ride-hailing apps to enter new markets across Europe as some countries, such as Italy, have stringent rules for private-hire vehicles.
But with Thursday’s ruling, ride-hailing apps could be classified as internet companies if they meet certain terms. They would then be regulated under the EU’s e-commerce directive, which shields internet companies from direct liability for hosted content.
Uber has long argued that the service it currently offers in Europe, UberX, is different from its other car-sharing service UberPop, and should be classified as an “information society service,” or an internet platform.
The decision was welcomed by major ride-hailing companies. The Star Taxi App case shows that “ride-hailing apps can qualify as an ‘information society service’ under EU law to serve European citizens,” said Bolt’s Dominick Moxon-Tritsch on behalf of MOVE EU, a trade association that represents Uber, Free Now and Bolt.
Anca Gherle, spokesperson for the app Free Now, called the decision a “victory,” as the company is embroiled in a similar legal fight with Romanian authorities.
A spokesperson for Uber said it will “continue to work constructively with authorities across Europe.”