Uber is a Taxi Company

A landmark ruling by EU’s top court recently has effectively classified Uber as a transport service and as such it should be regulated like other taxi operators.

Uber has always argued that it is simply a digital app, an intermediary between drivers and customers and thus should fall under lighter EU rules for online services.

Well that doesn’t seem to be the case anymore. At least, not in Europe.

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This stems from a 2014 complaint by the professional taxi drivers’ association in Barcelona that alleged unfair competition from Uber’s non-professional drivers in Spain and also charged Uber with “misleading practices.” Following this latest court ruling, Uber said that nothing will change as it already operates under the transportation law in the EU – – – and in fact thinks that — “it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe.” This landmark ruling could have a systemic effect to the digital and tech scene as a whole and make it much harder for start-ups to argue that they are simply a button on a smartphone and – – therefore not accountable to their workers and clients.

This underscores the dilemma that governments face when considering disruptive technology companies from Airbnb to Facebook:

should these companies be free to innovate and reshape the rules? Or be forced to conform with the rules that restrict their more traditional competitors.

Uber has been great since it came onto the scene in 2011 and it has transformed and distrupted the taxi industry

However as it did so, it also picked up a series of complaints, scandals and lawsuits.

This brings to mind Mark Zuckerberg’s old adage “Move fast and Break things” where new tech companies and startups emphasized building and growing fast as opposed to worrying about potential fallouts and repercussions

This ruling comes at a critical time for Uber, in light of the potential, and complex, deal with the SoftBank-led consortium.

Uber’s existing shareholders must decide by Thursday, December 28th, 12pm PT, whether to sell their shares to SoftBank for just about 33 dollars per share, a 30% discount to Uber’s latest valuation, or whether to wait until at least 2019 for an initial public offering.

At least 14% of shares must be sold to SoftBank for the deal to close.


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