Europe’s highest court has ruled that US-based ride hailing app Uber is a transport company, not a digital service.

The European Court of Justice (ECJ) said:

The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport. Member states can therefore regulate the conditions for providing that service.

The ruling came after a long battle between a group of Barcelona-based taxi drivers and the ride-sharing startup. It will have major implications for how Uber operates and is regulated across the European Union.

What does the ECJ decision mean for Uber?

Previously, Uber has maintained that it is a digital platform that acts as an intermediary between drivers and customers.

The ECJ has disagreed with this, declaring that the service is more than an intermediation service and is a transport service. This means that Uber will be subject to rules and regulations in different EU countries.

Uber can now only operate with a transport license. In the UK that could be under a hackney taxi license or a public service vehicle license, according to Peter Woodhouse, transport and employment lawyer at law firm Stone King.

Its operations will now come under a transport commissioner.The startup now has to set up stable operations bases and operational centres in the cities where it functions.

In addition, it will have to take more responsibility for its drivers, including training them and offering them official contracts.

Woodhouse told Verdict.

It would be the end of this certain iteration of Uber.

What does Uber think about it?

Ahead of the ruling, an Uber spokesperson told Verdict:

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Any ruling will not change things in most EU countries where we already operate under transportation law.

As our new chief executive has said, it is appropriate to regulate services such as Uber.

The last point is interesting. Since the new chief executive, Dara Khosrowshahi, took over from disgraced co-founder Travis Kalanick earlier this year, he has been making strides to change Uber’s shoddy reputation.

The company has been forced to withdraw from markets across Europe, including London, Denmark, and Spain.

The new ruling, combined with Khosrowshahi’s new leadership style, may help to improve relations between Uber and regulators in the EU.