UBER = Transport Service, ECJ Advocate-General says
11/05/17
‘What is Uber? Is it a transport undertaking, a taxi business to be blunt? Or is it solely an electronic platform enabling users to locate, book and pay for a transport service provided by someone else?’ These are the questions that Advocate-General Maciej Szpunar asks (at point 41) and answered today in his much awaited Opinion in the Spanish UBER case (C-434/15) before the ECJ’s Grand Chamber.
As we discussed in a previous post, a commercial court in Barcelona requested a preliminary ruling in an unfair competition case that a cabdrivers association brought against UBER. The court sought to clarify whether UBER is an information society service, an intermediation service or a transport service. While the first option would practically eliminate national authorities’ margin for regulation, the two other options, and notably the third one, would allow such regulation.
AG Szpunar quite literally kicks off stating that it is not relevant whether UBER should be qualified as a sharing economy platform. This case is particularly sensitive because of this “sharing” debate, fair enough, but a definition of ‘sharing economy – assuming that we could come up with a sensible one – does not seem useful for the legal debate (see footnote 13 of the Opinion!).
Conversely, what is relevant is to decide whether UBER controls the transport service or not. AG Szpunar thinks that the following factors tilt the balance towards a positive answer: (i) UBER’s dynamic pricing system; (ii) minimum safety requirements for drivers and cars; (iii) control over supply by encouraging drivers to work when and where demand is high; and (iv) control over the conduct of drivers and users by means of a rating system and the threat of exclusion from the platform (Opinion at 51). In the end, what is relevant for AG Szpunar is that UBER transport services are unthinkable without the UBER platform, contrary to what happens – or so he says – with on-line hotel or flight booking services or even with other taxi apps (e.g. Hailo or MyTaxi, that recently merged). In his own words, UBER ‘actually does much more than match supply to demand: it created the supply itself.’ (at 43).
Irrespective of the labour relationship between UBER and its (!) drivers, and of who owns the cars (which the parties discussed before the ECJ but AG Szpunar deems to be of little interest for the purpose of his assessment) UBER is providing both the transport and the electronic intermediation service but, taking into account the configuration of UBER services, the latter yields to the former. In such a situation, national (here, local) authorities may impose licensing or other market access requirements, since transport is excluded from the Services Directive.
AG Szpunar states that any other conclusion would lead to legal uncertainty by creating legal loopholes and thus encouraging illegalities. At the oral hearing on 29th November 2016, France, Spain and Ireland were among the countries supporting the plaintiffs in that UBER should be treated as a transportation service and as such be subject to national regulation. One is left to wonder whether such a black or white approach really does ensure legal certainty for the wealth of platform-based services that will come under scrutiny.
Interestingly enough, AG Szpunar further indicates that even if one considered that UBER provides both a transport service and an electronic intermediation services and that none of them should yield to the other, the conclusion would not change. In this case, the E-commerce Directive would preclude market access requirements for the intermediation service, but not for the transport service as such, and UBER would still be providing both. Which, again, might or might not be true in this case but could make a big difference to many other platform-based services.
At the hearing, the European Commission and the Netherlands (where UBER has its European headquarters) sided with UBER and considered it to be an information society service, which would mean that it escapes national or local regulation on taxis altogether.
It is too early to draw conclusions from this Opinion for other digital services within and outside of this (social, but not legal) ‘sharing economy’ concept – broad as it is indeed… For the moment, we will have to wait and see whether the Grand Chamber follows the Advocate-General’s Big Leap… forward?
