It is known as the gig economy. The Uber ride hailing company has been deemed to be a transport company by the European Court of Justice (ECJ). Uber disputed this, claiming to be a digital information service or part of the gig economy.
The Uber service, the firm claimed, puts those needing transport in contact with those that provide it. Uber does not provide a taxi service but acts as no more than a middleman in the transaction. The ECJ disagreed and has informed Uber that it must obey taxi laws in any EU country in which it operates.
The reason behind the case was called, because Uber was not obeying certain local authority taxi rules in Barcelona. Although Uber believes the impact of this ruling will be minimal, it is sure to have some implications.
What is the Gig Economy?
The gig economy is defined as short-term freelance work as opposed to working as a permanent employee. Under this definition, Uber drivers are not employed by Uber but work freelance. Uber claims that drivers are self-employed people for whom Uber provides a service putting them into contact with those requiring personal transport. By installing the Uber app, users can get reliable and safe transportation at the click of a button.
Uber drivers are not directly employed by Uber, although they pay the company a proportion of the earnings gained by means of people using the Uber app. According to the European Court of Justice, the Uber service is designed to connect, for remuneration, non-professional drivers using their own vehicle with persons wishing to make urban journeys.
Service In the Field of Transport = Transportation service
By definition, the ECJ has ruled, European Union law classifies such an arrangement as a “service in the field of transport.” What does this mean to Uber? Initially, it means that Uber and the drivers must conform to the local laws regarding taxi services. Member states of the EU may regulate the conditions under which Uber can operate.
The Barcelona issue is not the first time that Uber has clashed with local laws in different countries. In many cases, it has had to adapt to local regulations by making changes to its business model. However, the firm still claims to provide a digital information service rather than a transportation service.
The Gig Economy Affects Many Companies
This is just one of the many gig economy issues that this type of relationship involves. For now, the Uber ride hailing company must operate within the EU as a service in the field of transport and not as a digital information service. It may be a flagship case in the entire field of the gig economy. This could affect a large number of companies: including Uber! Time will tell whether or not this ruling is a watershed in the way the gig economy works.