The European Court of Justice (ECJ), the European Union’s highest court, ruled on Wednesday December 20th that Uber should be classified as a transport business rather than a technology platform. This landmark decision is significant for the following reasons:
- It will force Uber to adhere to the same rules that govern taxi companies in the EU
Taxi companies all over the world have brought anti-competitiveness claims against Uber, arguing that Uber receives an unfair advantage by not having to abide by the same rules as they do.
- The decision will likely have important ramifications for the legal distinction between independent contractors and employees
Labor disputes have arisen in many jurisdictions with some Uber drivers claiming they are being exploited by receiving none of the benefits (such as health insurance, social security and paid leave) afforded to traditional employees. Uber argues that its app merely acts as a platform for drivers to connect with riders and, as such, its drivers are independent contractors. The ECJ disagrees.
- It highlights the need for legislation around the world to keep up with the changing nature of work in the modern economy
A prominent British review released this year argues that the current independent contractor/employee binary legal distinction is not nuanced enough for gig economy workers. It suggested relabeling such workers under a third or hybrid category, known as ‘dependent contractors.’ Whether governments have the foresight to make such a change is another question.