Recent Judgment Marks a New Era in the Uber(X) Saga

Written on 21 Feb 2019

Judgment of 16 January 2019 Marks New Era in the Uber(X) Saga

The Enterprise Court of Brussels ruled in its judgment of 16 January 2019 that UberX is not a taxi service governed by the Brussels regulation of 27 April 1995 on taxi services and services with regard to the renting of vehicles with chauffeurs. This judgment marks a new chapter in the Uber saga.

The UberX  platform connects enterprises (both legal entities and natural persons) who have a LVC license (Renting of Cars with Drivers) with the so called Platform Riders Association (PRA) of which people who want to use Uber’s services need to become a member when downloading the UberX app.  The judgement of 16 January 2019 states that this approach is not a simulation and deems the UberX platform to be a mere intermediary, connecting LVC operators and passengers. Therefore Uber BV, when operating the UberX platform, is not subject to aforementioned Brussels regulation.

This judgment stands out when compared to the existing body of case law with regard to Uber’s services. The most well know decision in this respect is probably the European Court of Justice (“ECJ”) judgment of 20 December 2017 (C-434/15 Asociacion Profesional Elite Taxi c Uber Systes Spain SL). In this case, the ECJ held that the UberPop services, which connected non-professional drivers by means of a smartphone application  using their own vehicle with persons who wished to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of Article 58(1) TFEU. Consequently, such a service is not an ‘information society service’ and must be excluded from the scope of the right of freedom to provide services (Article 56 TFEU, Directive 2006/123) and the application of the e-commerce directive (Directive 2000/31), thereby enabling individual member states to prohibit the UberPop services.[1] This case law was later confirmed by the ECJ in a judgment of 10 April 2018 (C-320/16 Uber France SAS).

This approach of the ECJ was criticised in the legal doctrine. Some argued that following this approach would lead to, for example, Booking.com qualifying as a hotel or Deliveroo as a restaurant. Hence, this approach would not benefit innovative platforms and would cause member states to (overly?) protect the existing service providers in the market.

In its judgment of 16 January 2019, the Enterprise Court of Brussels agreed with Uber’s key argument, remarkably based on the ECJ case law, that in order to requalify an information society service as a service in the field of transport, the service must create a market which did not exist before. Uber argued that the LVC operators also have other means by which to conduct their business in addition to the UberX app, which leads to the conclusion that the UberX platform services cannot be regarded as a service in the field of transport.

The Enterprise Court of Brussels confirmed that the services performed by the LVC operators, via the UberX platform, fall under the scope of the rules with respect to services regarding the renting of vehicles with chauffeurs (i.e. Brussels regulation of 27 April 1995) and deemed the LVC operators sufficiently compliant in this respect. As a result thereof, Uber and the LVC operators may continue their services in the framework of UberX.

Finally, we would like to highlight that the Enterprise Court also tackled the workers’ status of the UberX drivers. From an employment law perspective, the platform economy gives rise to discussions about the workers’ status. Typically, the business model of the platforms requires that workers (drivers in Uber’s case) be self-employed. Some argue that the workers are forced into the self-employed regime by the platform but that they are misclassified, since they perform their duties as employees. Whether or not a worker is misclassified is assessed based on statutorily defined criteria (such as the wish of the parties, the freedom to organise the working time, the work and whether or not the company can supervise the worker). To our knowledge, the Belgian labour courts have not yet passed a judgment about the status of a worker delivering services via a platform in an individual dispute opposing the worker and the platform.

The judgement ruled by the Enterprise Court of Brussels of 16 January 2019 examined the question of whether a violation of the social legislation (on the status of the workers) is violating the fair market practices that each company must respect. The Court decided that there is no violation of the social legislation (and that the workers were not misclassified). It tested the factual situation of the drivers against the statutory conditions of worker misclassification. An interesting element in this context is that the Court ruled that geolocalisation is inherent to the service and not a supervision tool; the LVC operator uses his own car, is free to reject or accept a ride, and can hire personnel to perform the service, the rate Uber suggests is non-binding, etc.   This is interesting case law to be borne in mind should an individual worker challenge his status in front of a labour court.

The judgment of the Enterprise Court of Brussels of 16 January 2019 marks a new chapter in the Uber saga and could also prove to be useful for other (disruptive) platforms across Europe. Moreover, it is clear that there is a need for a “legal update” on the level of member states and EU-wide. This would benefit both disruptors and the disrupted service providers in the various sectors of the economy.

[1] Uber was already effectively banned from offering the UberPop services in Brussels as of the judgment of the Commercial Court of Brussels of 23 September 2015.