EU rules that Uber is a transport service, not a digital company

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A phone displays the Uber ride-hailing app on September 22, 2017 in London, England. Uber is appealing Transport for London’s decision not to renew its operating license.

Uber is a taxi company, according to a landmark ruling from Europe’s highest court.

The European Court of Justice (ECJ) ruled Wednesday that the U.S. ride-hailing app is a transportation firm and not a digital company. The verdict is a long-awaited judgment expected to have major implications for how Uber is regulated throughout Europe.

“Any ruling will not change things in most European Union (EU) countries where we already operate under transportation law. However, millions of Europeans are still prevented from using apps like ours,” an Uber spokesperson said in an email ahead of the decision.

Uber has long-considered itself an “information society service” which connects drivers and passengers through inter-mediation via their app. This subtle classification has helped to protect the multi-billion dollar start-up from national regulations and means it has been treated as a digital service operating across borders in the EU’s single market.

However, several European governments have argued the U.S. company should be considered a taxi firm, and just like thousands of others, it should have to comply with European transport laws.

The ECJ’s decision means Uber now faces national regulation in up to 28 member states.

Greg Marsh, co-founder and CEO of onefinestay, told CNBC on Wednesday that the majority of Uber drivers “really value” the company and the ride-hailing service was clearly “wildly popular” among consumers.

“If the majority of people want to use it as consumers and if a large proportion of the people who want to participate in it as drivers want it to exist then it seems a bit illiberal to say that we should be preventing it from operating,” he added.