Katja Vizjak, PhD candidate, University of Maribor, Faculty of Law
Uber is considered a part of contemporary collaborative economy business models that enable people to source jobs from various websites and applications. It represents a new kind of service and generates strong network effect by offering access to bigger markets. The main idea is creating benefits by getting underutilized resources to work in a more efficient way. According to Eurobarometer opinion poll, 52% of EU citizens are familiar with the services offered by the collaborative economy, 17 % of which have already used them at least once.
As a modern alternative to the incumbents this digital platform connects the users to the taxi service providers by means of an online ride-hailing application; it owns no vehicles, it neither employs drivers nor invests in infrastructure of EU Member States, obtains no taxi licenses for some of its services and is therefore incomparably more competitive than the existing providers.
Ever since its arrival from the USA in 2011, Uber has faced numerous unexpected obstacles regarding the operation of its services due to stricter European regulatory system. There are issues regarding the correct and reasonable implementation of the existing legal framework since the legal status of the sharing economy service providers has yet to be determined. In the USA, Uber has already been classified as a “transportation network company”; in the meantime, the proper classification in the EU remains unclear, mostly due to the lack of clarity in the existing regulatory framework of the European single market. Upon the request by the Spanish commercial court for a preliminary ruling the CJEU is expected to deliver a verdict on the main purpose of Uber service in 2017; namely, whether it should be considered an information society services company, a transport company or a combination of both. The answer to this question is about to have a significant impact on the future regulation of other intermediary digital platforms.
As far as unfair competition is concerned, Uber opposes this by stating that it does not provide a transport service; if it did, it would underlie the EU member states national legislation on transport services, as stated in the Services Directive, recital 21; instead, it defines itself as an intermediary between the self-employed drivers and their customers, providing information society services protected by the EU principle of freedom of establishment as set out in Article 49 and 56 TFEU, the provisions of European legislation on digital single market, i. e. the e-Commerce Directive 2000/31/EC and the Services Directive 2006/123/EC.
Across EU, the service UberX performed by drivers with a professional license is mostly allowed, but the service UberPOP, which used private non-licensed drivers with their own vehicles, has been discontinued almost all over EU. In response to that, Uber has filed complaints with the European Commission against some EU Member States alleging that they are in violation of Article 49 (freedom of establishment) and Article 56 (freedom to provide services) of the TFEU.
The European agenda for the collaborative economy, issued by the European Commission in June 2016, offers criteria to determine what kind of service a digital platform provides and helps to implement EU legislation in cases of such business models, concerning the requirements as to the market access, liability regulation, consumer protection, employee qualification and taxation, adding instructions to the EU Member States regarding the appropriate, non-discriminatory legislative regulation on the national level in order to avoid obscurity and confusion. Some solutions within EU law have already been proposed for Uber to overcome these regulatory obstacles, based on the combinations of Article 4(3) TEU (the duty of sincere cooperation), Article 49 (the freedom of establishment) and Article 56 TFEU (the freedom to provide services), and rules applying to undertaking, i. e. Articles 101,102 and 106 TFEU. Another possibility would be a special legislative document, a new directive, established by EU, covering all special risks concerning areas of liability, taxation, social security, employment etc. Furthermore, some provisions that cause obstacles of entry to the inner market should be revised and adjusted in order to allow fair competition between the traditional taxi companies and the newcomers, in a way that no category of service should be privileged.
The main question remains, what to regulate (yet not overregulate) and to what extent, in the field of the EU competition and labour law in order to achieve public interest objectives. It is not questionable whether Uber should be able to perform its services or not, but it should be able to operate in a manner that would protect its users and take account of social and environmental costs and benefits.