Uber Technologies Inc. suffered a major defeat in its effort to overturn strict rules and licensing requirements in Europe, after the bloc’s highest court Wednesday ruled the ride-hailing company should be regulated as a transportation service, rather than a digital service.
The judgment by the European Court of Justice won’t force Uber to curtail most of its services in Europe, but the decision is a blow to the company’s efforts to use courts to lighten its regulatory load—and forces it to deal more directly with national and local governments that set rules governing car and transport services in Europe. Those authorities have sought to hold Uber to often-strict rules and licensing requirements that apply to taxi and traditional car-hire services.
“This ruling will not change things in most EU countries where we already operate under transportation law,” an Uber spokeswoman said. “As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe.”
Still, the decision could have wider ramifications for Uber, and other sharing-economy firms, in markets beyond Europe. Officials here over recent years have taken a more aggressive stance than other jurisdictions on a wide array of regulatory and enforcement issues affecting Silicon Valley firms—including taxes, privacy and alleged anti-competitive behavior. While the legal reach of such rulings extends only to Europe, other jurisdictions have started looking to the continent as an example when tackling regulatory and enforcement issues on their own turf.