Uber will now face more stringent government control in Europe, after the European Court of Justice ruled it would now be regulated as a transport service.
The decision, which cannot be appealed, marks the conclusion of a longstanding legal battle with the professional taxi drivers’ association in Barcelona regarding unfair competition.
Uber had previously been regulated as an online service that connected drivers and passengers, meaning it faced fewer restrictions than taxis.
The European Union (EU) will now enforce the same regulations taxis and other transport services abide by to Uber.
“The Court takes the view, first of all, that the service provided by Uber is more than an intermediation service consisting of connecting, by means of a smartphone application, a non-professional driver using his or her own vehicle with a person who wishes to make an urban journey,” the ruling said.
“Therefore, the Court finds that that intermediation service must be regarded as forming an integral part of an overall service whose main component is a transport service and, accordingly, must be classified not as ‘an information society service’ but as ‘a service in the field of transport.’”
The new classification means that Uber will now have to comply with the EU’s rules for taxis and other transport companies, which include stricter licensing requirements and employee benefits for drivers.
The decision comes as yet another regulatory hurdle for the ride-sharing company, following a tumultuous 2017.
Allegations of sexual harassment and a harmful internal culture plagued the company, and ultimately led to the resignation of former CEO, Travis Kalanick in June.
Similar regulatory battles have been fought across the world, including a recent decision from the United Kingdom’s Supreme Court that now gives drivers access to a minimum wage and holiday pay.
However, Uber downplayed the significance of the EU ruling, saying it is pro-regulation.
“This ruling will not change things in most EU countries where we already operate under transportation law. However, millions of Europeans are still prevented from using apps like ours,” said an Uber spokesperson.
“As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe.”
While the immediate impact of the decision is expected to be minimal, the increased costs of licensing fees and employee benefits that Uber now faces could result in higher costs for consumers in the future.
The ruling also sets a precedent for the European Union as it begins to regulate the digital economy, with food-delivery services popular in Europe, such as Foodora, also expected to face stricter government regulation in the future.