The European Court of Justice ruled Uber is a transportation service and must be regulated as a taxi company by EU member states, with the ride-hailing service provider insisting the development won't significantly affect its operations on the Old Continent. Industry watchers remain somewhat skeptical of such claims, especially in the wider context of their implications for the gig economy as a whole. Trades Union Congress General Secretary Frances Lorraine O'Grady labeled the ruling as a legal win over services looking to "return to the type of working practices we thought we'd seen the back of decades ago," adding how major technological advancements should do the exact opposite and be used for improving working conditions.
Uber says it currently operates under taxi laws of most EU member states but will now be required to do so in all countries that are part of the political bloc. Minimal wage, insurance, and holiday pay should hence all be part of the package the company will guarantee to its European drivers going forward. While the ECJ and most EU member states don't practice law that's heavily precedent-based and comparable to the common law system of the United Kingdom and the United States, the high-profile case signals other services contributing to the gig economy like Airbnb may also soon face more aggressive regulations. With the ruling being set to directly impact Uber's bottom line, additional questions about its massive valuation are also expected to arise as investors are becoming more skeptical about the company's ability to actually make money and compete in the long term once it stops subsidizing rides.
The San Francisco, California-based startup has had a rough year, having been at the center of multiple scandals and controversies that ultimately led to the ousting of its co-founder and former Chief Executive Officer Travis Kalanick. New CEO Dara Khosrowshahi has been on an apology tour even since taking over the firm in late summer, looking to repair its damaged relations with regulators and make its practices more transparent. Uber may be dealt another blow in Europe next year once its appeal to Transport for London's decision to deny its operating license renewal request is concluded. The company is presently targeting a 2019 IPO.