The EU’s top court has ruled that Uber is a taxi service and can be regulated like other transport firms.
The long-awaited decision could have wide-ranging implications for how Uber, and other gig economy firms, can operate across the continent.
Uber had labelled itself an “information society service” that merely connects drivers with passengers through an app.
The European Court of Justice has rejected that argument.
The Luxembourg court said that a service whose purpose was “to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys” must be legally classified as a transport service.
“As EU law currently stands, it is for the member states to regulate the conditions under which such services are to be provided in conformity with the general rules of the treaty on the functioning of the EU,” the judgment read.
The judgment is final and cannot be appealed and means Uber faces tougher regulation in the EU’s 28 member states.
The US firm has attracted the ire of local taxi operators and regulators, many of whom say that it has been allowed to operate with too little oversight.
States are now free to impose restrictions or conditions on Uber as they would with any other mini-cab service.
Prior to the judgment, a spokesperson for Uber said: “Any ruling will not change things in most EU countries, where we already operate under transportation law.
“However, millions of Europeans are still prevented from using apps like ours. As our new CEO has said, it is appropriate to regulate services such as Uber.
“We want to partner with cities to ensure everyone can get a reliable ride at the tap of a button.”
A Spanish taxi drivers’ association had brought the case, arguing that Uber is a taxi company and should be subject to the same rules as other such businesses.
It is the latest blow for Uber, which has faced a number of legal challenges around the world.
Transport for London refused to renew Uber’s licence, stating that it did not deem the firm be “fit and proper” to run a taxi service, citing a string of safety concerns.
Uber has appealed the decision and will be free to operate in London until that process is exhausted.
Last month, the company lost a separate appeal in the UK against an employment tribunal ruling that its drivers were workers and must be afforded corresponding legal rights.
That means that the California-based company will have to pay drivers a minimum wage in the UK, provide sick pay and holiday pay.
Uber has vowed to launch another appeal in the case.