Uber’s efforts to define how companies should operate in the gig economy have suffered another setback. The Court of Justice, the highest court in the European Union regarding European Union Law, has ruled that the company should be regulated as a transportation service. The ruling is consistent with a recommendation from an advocate general at the court that was made in the spring.
The case was based on a complaint from Elite Taxi, a professional association representing independent taxi drivers in Barcelona, Spain. The association had complained that Uber’s UberPop service, which uses drivers without professional licenses, was able to operate at lower prices in Barcelona because the Uber drivers were not obtaining taxi licenses or authorization from the city, costs that other taxi drivers had to incur.
The ruling was a rejection of Uber’s argument that it is a technology services company whose app connects drivers to riders.
Uber’s longstanding efforts to redefine the traditional views of how it should be regulated have dragged the company in various court cases in different parts of the world with similar results.
For example, the UK Employment Appeal Tribunal in November upheld an earlier decision that the Uber drivers should be classified as workers rather than independent contractors. Worker is an employment classification in the UK that falls between employees and self-employed contractors. Workers receive such things as holiday pay, the national minimum wage and sick pay, but not all of the rights of employees. Uber has said it plans to continue to appeal the ruling to higher courts.
Uber has been engaged in several court proceedings in United States to fend off complaints by drivers that they should be classified as employees rather than independent contractors. So far, Uber has been able to settle these cases out of court before any decision was reached.
Uber’s continuing failures to avoid traditional regulatory practices demonstrate the challenges of trying to make the gig economy a reflection of new business practices rather than have it bound by more traditional models for how companies should operate.
Uber’s situation demonstrates the focus by governments and courts around the world on protecting worker rights as the gig economy expands. With 34% of the U.S. work force now estimated to be part of the gig economy, and that percentage expected to grow to 43% by 2020, U.S. companies should review their own regulatory and employment policies to see where they fit or fall out of compliance with current regulations, as well as keep up with regulatory trends, particularly at the state level, that seem to indicate greater support for protecting the rights of working Americans, particularly in areas of workplace and pay discrimination.
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