European court says Uber is officially a taxi firm.
It’s time we admitted it: Uber is a company that has some serious issues. They’re like that little kid who’s always in trouble at school, but admittedly never for the same infraction twice. As a bro-based business model, they find new ways to end up in a courtroom all the time.
The latest infraction is pretty mild compared to other incidents on the broad spectrum of expensive, reputation-marring problems the company has had to battle. While things like invasion of privacy, a culture of sexual harassment and discrimination, and an attempted cover up of a large-scale data breach might grab all the headlines, this latest issue is just as damaging.
You ARE a taxi service
A court in Barcelona has effectively undone the very backbone of Uber’s business model, namely that they are not a transportation service and therefore don’t have to treat their drivers or passengers with any kind of regard. When Uber first opened its doors, taxi and other mass transit agencies were outraged; how could any random citizen provide the exact same service but without the expensive hoop jumping that other companies face, all while undercutting them in cost and convenience?
Uber got away with it by insisting that they were nothing more than an information go-between that connected two individuals, the driver (who does not work for Uber) and the passenger. Uber’s fee was for the information and use of the app, nothing more. But one court has now ruled against that notion. If you are a company that enables someone to put a person in a vehicle and charge money to move that person to another location, you’re a taxi company and will be held to the same licensing and standards.
A company spokesperson explained to the BBC that this only has implications in small markets across the EU, and does not indicate a change in the company’s model. However, the court said it applies to all EU member states.
This rules also has farther reaching potential effects in other unrelated industries that are also skating by as an “information service.” AirBnb could be reclassified as a hotel or rental property management agency despite not owning any property, for example, and Hello Fresh could be required to build itself as a retail grocer despite not operating a store.
In this case, it comes down to how much of a footprint does Uber want to maintain in a place that requires it to behave just like a taxi company. There’s still hope that the company could still thrive just for the sheer convenience of summoning a ride to your location, even if that ride has to behave more like a taxi than a futuristic business model.