Advocate General issues opinion on Uber

23rd June 2017 by Vanessa Barnett

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This article discusses the opinion issued by the Advocate General of the Court of Justice of the European Union (CJEU) in which he concludes that Uber should be regulated as a transport company and be subject to the same rules as taxis.

If you have ever watched a Superman movie, you’ll be familiar with the famous quote, “It’s a bird. It’s a plane. It’s Superman!” With Uber, it’s a bit more, “It’s a unicorn. It’s software. It’s a (sort of like a) taxi company.”

Each time Uber or any of the other gig economy companies go to court, we get a small window on how the court’s thinking on these new business models is evolving. The author’s current take is that they are beginning to understand what’s below the surface of the various technology platforms, a lot better than previously.

In particular, there is currently a case in the commercial court in Barcelona (Asociación Profesional Elite Taxi v Uber Systems Spain SL, Case C‑434/15) which concerns whether or not Uber benefits from one of the four founding freedoms of the EU market: the right to provide services. If Uber is only an intermediary between passengers and taxis, then it does benefit from the freedom. But if it is more than that – a type of service in a protected category which is subject to licences – then it’s not so easy for Uber to deliver its business model there.

The commercial court in Barcelona has asked the CJEU for help in interpreting the relevant EU laws. The case has got to the stage where Advocate General (AG) Szpunar has issued his opinion. The CJEU does not always follow an AG’s opinion, but they are followed most of the time and considered to be highly influential. An AG’s opinion is meant to be a wider consideration of the laws and issues, whereas the justices of the CJEU will then focus more narrowly.

The AG pretty quickly nails his colours to the mast: “…the development of new technologies is, in general, a source of controversy, Uber is a case apart.” You can already tell where things might be headed, and the AG recognises too that this is a “highly politicised issue that has received a great deal of media attention”.

The argument at play is not new: “You’re a taxi company” vs “No, we’re a technology platform.” The AG looked hard at whether Uber is effectively a single service or two different but connected services – in effect, whether the transport aspects of Uber could stand alone without the platform.

The AG whizzes through many of the observations with which we are familiar: platforms, the gig economy, the status of the drivers. Critically, the AG calls out that Uber “claims that it simply matches supply (the supply of transport) to demand. I think that is an unduly narrow view of its role. Uber actually does much more than match supply to demand: it created the supply itself. It also lays downs the rules … of the supply and how it works” and observes that “it is apparent that most trips are carried out by drivers for whom Uber is their only or main professional activity”.

The critical recognition is that “Uber exerts control over all the relevant aspects of an urban transport service: over price, obviously, but also over the minimum safety conditions by means of prior requirements concerning drivers and vehicles, over the accessibility of the transport supply by encouraging drivers to work when and where demand is high, over the conduct of drivers by means of the rating system and, lastly, over possible exclusion from the platform.”

Is that just a very finely tuned way of saying that if it looks like a fish, and smells like a fish, well it’s a fish? It appears so. This case is not a final ruling, but it is an AG’s opinion – it has substance and influence. This case will crawl through the courts, getting back to the Barcelona commercial courts. We’ll have to wait and see. But it would be surprising if the CJEU strayed too far from the AG’s point of view.

Over the years a number of new technology businesses have sought to disrupt old ways of doing things with clever platforms, and there’s one thing that is always found to be true: you can dress a business in legal arguments and terms and conditions, but, eventually, the facts win out. If your technology business really is the equivalent of “Faster than a speeding bullet, more powerful than a locomotive, able to leap tall buildings in a single bound”, do just check out the law first so that you’ll know very early on if there are some pre-Internet-type laws that might get in your way.

Vanessa Barnett is a Consultant Solicitor with Keystone Law.

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About the Author

Vanessa is a commercial lawyer with Keystone Law who helps clients who are using technology to innovate or disrupt established ways of doing things.

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