EU court ruling: $68 bn Uber be treated as a taxi company

LAHORE: Following European Union’s recent decision to treat Messrs Uber Technologies like a taxi company has surely made esteemed American media houses like Bloomberg believe that ‘it was actually a trans-Atlantic divide over how governments cope with disruptive technologies and could embolden US cities to restrict the ride-sharing service.’

Uber’s EU case has been closely watched by the technology industry because of its precedent for regulating the gig economy, where freelancers make money by plying everything from spare rooms to fast-food deliveries via apps on smartphones.

On Dec 21 last, the Bloomberg had stated: “The EU Court of Justice ruled against Uber, which had argued it is connecting passengers with independent drivers, not a transportation company subject to the same rules as taxi services.

“In the US, states have passed broad-based laws governing ride-sharing businesses, brushing aside traditional taxi-industry regulations for Uber and Lyft Inc.” It had asserted: “The ruling comes as European authorities have battled with Silicon Valley’s biggest technology companies. Clashes include Apple Inc. falling out with Ireland over a 2016 decision to pay $15 billion in back taxes, Alphabet Inc.’s Google being hit with a record $2.8 billion fine over shopping ads, and Facebook Inc. and Twitter Inc. facing inquiries for the spread of hate speech. Paris regulators are clamping down on Airbnb, treating the home-rental website like a hotel.”

The Bloomberg maintained: “The EU ruling could inspire some cities that have already had a prickly relationship with the ride-sharing services. San Francisco’s city attorney is investigating whether Uber’s service is a public nuisance. In New York, officials are mulling ways to tighten controls. And Seattle has passed an ordinance to make it easier for Uber drivers to unionise.”

The Washington Post writes: “The decision opens the door on European cities to impose stricter regulations on the ride-hailing company as a taxi operator. That means Uber will have to abandon services, such as UberPop, the equivalent of UberX in the United States, that use non-professional drivers and instead abide by local rules governing taxis.

Uber said it operates in most European markets with certified drivers and won't change things much for them. But some experts say the company and smaller competitors that see themselves mainly as digital platforms may soon be faced with new, government-imposed obstacles, which may stymie their growth.”

Some facts and numbers pertaining to Uber:-Founded in 2009 with seed money of just $200,000, Uber Technologies Inc. is a global taxi technology company headquartered in San Francisco and is currently operating in 633 cities worldwide.

Having its origins in the German word ‘uber’ meaning ‘above’; the fares of this taxi service in most parts of the world are based on a dynamic pricing model, in which fares are higher during periods of high demand for rides.

According to the esteemed Wall Street Journal, Uber today has a valuation of $68 billion and had successfully completed its one billionth ride in 2015!

In October 2016, 40 million riders used the service in a single month and that riders spent an average of approximately $50 per month on the service.

At the beginning of 2017, Uber's share of the United States ride hailing market was 84 per cent. The number dropped to 77 per cent in May, possibly due to challenges and controversies faced by the company.

Uber and the UK

On October 28, 2016, the Central London Employment Tribunal ruled that Uber drivers were "workers" entitled to the minimum wage, paid holiday and other normal worker entitlements, rather than self-employed.

Two Uber drivers had brought the test case to the employment tribunal on behalf of a group of drivers in London. On November 10, the court upheld the ruling against Uber's appeal, although the company announced it would launch a new appeal.

Uber and Pakistan

In January 2017, Uber was asked to obtain a no-objection certificate, a fitness certificate and a route permit in order to continue their services in Pakistan. However, Uber fulfilled all the legal formalities in the given one month time.

United Arab Emirates

In January 2017, after a long spat with regulators, Uber had signed an agreement with Dubai Roads and Transport Authority.

Under this deal, Uber will be entitled to deploy about 14,000 vehicles around the city.

Saudi Arabia

Uber is free to operate in Saudi Arabia, however, King Salman’s September 2017 decree allowing women to drive themselves is expected to put a dent in Uber's business in the country.

Women have been a key target group for Uber in the Saudi Arabia, accounting for 80 per cent of rides.

Poland

In Poland, following protests by taxi drivers, laws were modified so that Uber drivers do not enjoy a regulatory advantage over taxi drivers.

Spain

Uber was banned from Spain in December 2014 and returned back in March 2016, this time using only licensed drivers.

It has since had a legal battle against Spanish taxi drivers, but the Spanish Supreme Court is granting numerous licensed vehicles to future Uber cars, establishing the possibility to grant approximately 10,000 new licenses.

India

In Delhi, Uber at one time was faced with limits to the number of drivers who were allowed to operate.

In August 2017, Uber top brass had predicted that there was a likelihood that the country might even overtake San Francisco-based ride-hailing firm’s home market — the US — to become the largest for the company.

Italy

In May 2015, the Milan Court had banned Uber, alleging "unfair competition" and violation of the local jurisdiction regulating taxi services. The lawsuit was originally initiated by the Italian taxi drivers union.

After a Rome judge ruled in favour of Italy's major taxi associations that the ride-hailing service constituted unfair competition, Uber was banned throughout Italy at the beginning of April 2017.

One week later, another court in Rome suspended the initial ruling after accepting Uber's appeal, allowing the service to remain in Italy.

Few lawsuits and controversies involving Uber

In March 2017, Uber had lost a legal case against Transport for London (TFL) that attempted to stop a written English exam being required for drivers to obtain a minicab licence.

Uber's five year licence to operate in London was extended for only four months from May 2017.

In September 2017, the TFL announced that Uber's London licence was not to be renewed upon expiry, taking the decision on the grounds of "public safety and security implications.’

The TFL had alleged that Uber did not properly check criminal and medical records, didn’t report crimes committed by drivers, and use “Greyball” to prevent officials from investigating crimes and regulatory violations.

“Greyball” is a software tool used by Uber to identify and deny service to certain riders, including riders who it suspects of violating its terms of service.

An appeal was launched in mid-October 2017, when the company filed relevant papers with Westminster magistrate’s court

In January 2017, Uber agreed to pay $20 million to the US government to resolve accusations of having misled drivers about potential earnings.

In 2017, another suit was filed against Uber alleging that it uses "sophisticated software" to defraud both drivers and passengers. According to the suit, under the upfront pricing model, when a passenger is quoted a price the app shows a longer more expensive route, meanwhile would-be drivers are shown a shorter cheaper route. The passenger is charged for the more expensive route, while the driver is paid the cheaper, with Uber pocketing the difference.