Uber in European Court of Justice fight over its status
Uber faces a case in the European Court of Justice over its status as a digital service rather than a transport company. Facing opposition from regular taxi companies around the continent who claim the service creates unfair competition by avoiding strict local licensing and safety rules, the court is expected to come to a decision in March next year at the earliest.
Uber CEO Travis Kalanick. David Paul Morris/Bloomberg via Getty Images

Uber is going to court in Europe, in a case that could have huge implications for the app-based economy across the continent.

On Tuesday, the Californian taxi-hailing company will seek to convince Europe's top court that it is a digital service, not a transport company, in a case that could determine whether app-based startups should be exempt from strict laws meant for regular companies.

The case first began in Spain in 2014 after Uber faced opposition from the incumbent taxi industry — and it has now reached the European Court of Justice.

The US taxi app, which launched in Europe five years ago, has faced fierce opposition from regular taxi companies and some local authorities, who fear it creates unfair competition because it is not bound by strict local licensing and safety rules.

Supporters, however, say rigid regulatory obligations protect incumbents and hinder the entry of digital startups which offer looser work arrangements to workers in the 28-country European Union looking for more flexibility, albeit without basic rights.

Uber found itself in the dock in Spain after Barcelona's main taxi operator alleged in 2014 that it was running an illegal taxi service. The case concerns its UberPOP service which the company halted after the lawsuit.

Uber maintains that it is simply a digital platform that connects willing drivers with customers, and is not a transport service.

The Spanish judge subsequently sought guidance from the Luxembourg-based European Union Court of Justice. (The case is Case C-434/15 Asociación Profesional Elite Taxi.)

A ruling characterizing Uber as a transport service could expose it to stricter rules on licensing, insurance and safety, with possible knock-on effects on other startups such as online home rental company Airbnb.

The case has drawn global interest. The Netherlands, where Uber has its European headquarters, Finland, Poland, Greece and the European Free Trade Association (EFTA) have submitted written observations that tend to support Uber.

Spain, France and Ireland in their submissions however say Uber is a transport service. A grand chamber of 15 judges will hear the arguments, with more than 200 participants signed up for the hearing.

The New York Times reports that the court is expected to rule in March 2017 at the earliest.

Meanwhile, the European Commission is trying to boost e-commerce, a sector where the EU lags behind Asia and the United States, to drive economic growth and create jobs — efforts that could be severely hampered if the ECJ rules against Uber and the app economy more broadly.