ECJ ruling – Is it over and out for Uber?

The recent ECJ ruling that Uber operates as a transport company rather than a digital platform is a final decision with no right of appeal.  It is binding on all 28-member states (including the UK).  Faced with similar challenges in other EU states, it is no longer possible for Uber to argue that it is simply a digital platform and therefore outside local or national transport regulations.  The ECJ has ruled that how each state interprets such regulations is up to them but Uber should now be treated in the same way as other (traditional) taxi firms.

Uber maintains it already operates under local transport law in most European cities, and therefore the decision is of limited impact.  However, the decision will be relied on in the appeal challenging the self-employment status of its drivers, not least the ECJ finding that “it exercises decisive influence over the conditions under which the drivers provide their service”.  This ‘control’ supports the claim that the drivers are ‘workers’ rather than genuinely self-employed and therefore have the right to the national minimum/living wage, statutory holiday pay and sick pay.  Given that Uber’s business model depends on its drivers being self-employed, worker status would mean that fares will undoubtedly increase.  Uber drivers could also find themselves being taxed on an employed rather than self-employed basis.

Challenges to self-employed status are not limited to Uber and similar claims have been made against other gig economy companies as well as traditional companies such as Pimlico Plumbers.

The Taylor Report which was commissioned by the government and published in July 2017 did address the issue of workers status but has yet to be implemented.  Until such time as the position is clarified, the challenges will continue.

The ECJ ruling will also impact on other gig economy companies who may find themselves being classified as traditional companies rather than digital platforms and therefore subject to regulation, such as Airbnb.  It is unlikely that the government would take steps to repeal the ECJ decision, if and when, the UK final leaves the EU.

Uber had denied it was a transport company, arguing instead it was a computer services business with operations that should be subject to an EU directive governing e-commerce and prohibiting restrictions on the establishment of such organisations.