Uber was dealt a potentially massive blow in Europe Thursday, after the region’s top court said the company should be classified as a transportation firm and must therefore follow local laws governing traditional taxi services. Uber had argued it was a digital service, and this ruling will significantly hinder its ability to compete.
The latest potential blow to the $70 billion company comes at a time when it’s facing a criminal investigation into alleged illegal efforts to trick regulators; a lawsuit claiming its driverless car technology is stolen; claims of sexual harassment in the workplace, and a never-ending stream of executives departing.
The Court of Justice of the European Union (ECJ) said in a statement: “The Uber electronic platform, whilst innovative, falls within the field of transport: Uber can thus be required to obtain the necessary licenses and authorizations under national law.”
The ruling, by Advocate General Maciej Szpunar, is non-binding, but judges at the court tend to follow these opinions in most cases. A binding decision by the ECJ is expected later this year.
The 15-judge panel heard the case last November after a 2014 complaint in Spain brought by the Spanish taxi association was referred to the ECJ.
Uber told VICE News that it is awaiting the final ruling but added that “being considered a transportation company would not change the way we are regulated in most EU countries as that is already the situation today.”
The statement from the company goes on to say that such a ruling would “undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button.”
Uber, which does not own any of the cars and whose drivers are technically self-employed, claims it is simply an intermediary between customer and driver and, as such, should not be regulated like a traditional taxi company. Opponents say that Uber is overseeing a huge fleet of drivers and cars and must therefore be subject to the same strict regulations as everyone else.
This ruling could well be the latest blow in a long line of controversies which have dogged the company and its CEO Travis Kalanick. Here’s a list of just some of the issues the company is currently grappling with:
- Waymo lawsuit: Uber is currently involved in a lawsuit with Waymo, the driverless car arm of Alphabet, which has accused its former employee Anthony Levandowski of illegally downloading 14,000 documents related to its driverless car tech before leaving the company. Waymo claims Levandowski used that information to found his self-driving truck company Otto, which Uber subsequently bought for $700 million. Uber calls the lawsuit “a baseless attempt to slow down a competitor.” But with Kalanick saying autonomous vehicles are key to the company’s future, the outcome of this lawsuit could be potentially fatal for Uber.
- Greyball: The News York Times revealed in March that for years Uber has been using a program called Greyball, allowing the company to prevent users it thought might be working for regulators or law enforcement from using its service. Uber has admitted the existence of the program and now the Department of Justice has opened a criminal probe.
- A toxic workplace: In February, former programmer Susan Fowler revealed she had been discriminated against and sexually harassed while working at the company. This claim prompted several other stories about the toxic workplace culture at Uber where infractions by top performers are allegedly ignored – including a female employee being groped; someone shouting homophobic slurs at a subordinate; and one top level staff member threatening to beat an underperforming employee’s head in with a baseball bat. Uber has brought in former U.S. attorney general Eric Holder to investigate, with a report due at the end of May.
- Resignations: 2017 has seen a constant stream of executives leave the company. In March, president Jeff Jones departed over his concerns about the leadership of the company. Around the same time, Uber’s vice president of mapping Brian McClendon left; self-driving director Raffi Krikorian departed; vice president of product and growth Ed Baker said goodbye, and the company’s head of communications Rachel Whetstone signed off. On a more positive note, Uber has just hired AI superstar Raquel Urtasun and is actively looking for a chief operating officer to help guide Kalanick.
- Kalanick: Many observers claim the problems at Uber stem from the top, and the CEO did nothing to dissuade them of this view when he was caught on video berating an Uber driver after he complained about lower fares.
- Regulators: For years before any of the recent controversies arose, Uber had been battling regulators and taxi drivers in many of the 70 countries in which it operates today. Taxi drivers see Uber as a major threat to their way of life. Among their complaints: Uber undercuts them on fares, drivers don’t have to pay for licences, they gouge customers with surge pricing, have inadequate insurance, and don’t do proper background checks on drivers.
Cover: Sipa USA via AP