The European Court of Justice (ECJ) [official website] on Thursday issued a non-binding opinion [text] finding that Uber [corporate website] is a transportation company subject to additional regulations and fines. Uber presented itself as technology services that uses infrastructure to provide transportation. But a Spanish taxi union argued the description gave Uber an unfair tactical advantage because the company was not subject to the same rules and regulations as other transportation companies. The court found because Uber controlled every aspect of the encounter, it was a transportation company and subject to the all local rules and regulations of the jurisdictions they enter. It did uphold Uber’s right to have independent contractors instead of employees and refused to order an injunction on the app.

Uber’s activity must be viewed as a whole encompassing both the service of connecting passengers and drivers with one another by means of the smartphone application and the supply of transport itself, which constitutes, from an economic perspective, the main component. This activity cannot therefore be split into two, for the purpose of classifying a part of the service as an information society service. Consequently, the service must be classified as a ‘service in the field of transport’

The court refused to rule on the use of technology in the Uber scheme and remanded the case for a lower court to decide if any penalties are necessary.

Since its inception, Uber has mounted legal challenges based on its business model. Last Thursday it became public that the the Department of Justice (DOJ) has launched a criminal [JURIST report] investigation into the company for the use of a software tool that helped drivers evade local transport regulators. The US Federal Trade Commission (FTC) announced [JURIST report] in January that Uber Technologies [corporate website] agreed to pay $20 million to settle a claim that the ride-hailing company had engaged in misleading tactics to recruit new drivers. The European wing of Uber was indicted [JURIST report] in Denmark last December on charges of assisting drivers in their violation of taxi laws.