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Is Uber a 'digital service' or a transport company?

Uber is headed to one of Europe's highest courts on Tuesday to determine whether it is a 'digital service' or a transport company.

Published onNovember 26, 2016

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This is the question a European court aims to answer on Tuesday, as Uber attempts to argue its case to avoid the strict regulatory standards applied to traditional transportation companies. The European Union Court of Justice will assemble 15 judges to hear the case, with grave consequences for Uber and other mobile startups like it if things don’t go its way.

Uber is already in hot water over its official status in Asia, where the app may be banned from Taiwan entirely for failing to pay taxes as a transportation company. Tuesday’s court case could cause serious headaches for not only Uber but other mobile app ‘rental’ services like Airbnb.

The issue is this: Uber claims it is a digital service that connects drivers with passengers, but is not a transportation company. Whether this is simply a matter of perspective or a dodge to avoid the stricter rules and higher taxes demanded by a transport company, Uber definitely benefits if it is considered a mobile service rather than a transport company.

Uber starts rolling out a simpler design for its Android app

Not surprisingly, the court case was initiated in 2014 by a taxi service that felt the way Uber operates is unfair to existing taxi companies, who are beholden to expensive licensing and safety regulations. The case has divided opinion in Europe, with some countries backing Uber’s claim and other’s siding with the taxi drivers.

The case could have a huge trickle-down effect on other digital startups that are currently considered mobile platforms. These companies, including the likes of Airbnb, which again ‘simply’ connects willing hosts with guests, may well face redefinition in the wake of the Uber result. It’s a landmark case with far-ranging implications, so we’ll be sure to bring you the verdict when it is handed down.

Do you think Uber is a digital service or a transport company?

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