Driving test

There are several principal outcomes for lawyers from the opinion of the advocate general (AG) of the Court of Justice of the European Union (ECJ) in Asociación Profesional Élite Taxi v Uber Systems Spain, S.L. (Case C-434/15)? I will offer three.

As a reminder, the AG said that Uber had to comply with local taxi regulations and could not claim to be bound only by the more liberal EU-wide regulation of digital services. The AG’s opinion is followed by the court in a majority of cases.

This is the first case to be decided at European level about the legal definition of the delivery of services through electronic platforms. There was another which reached the ECJ involving Uber in Brussels – Uber Belgium BVBA v Taxi Radio Bruxellois NV (Case C-526/15) – but it was dismissed last year for being inadmissible because of the way the referring question was framed.

The first outcome for lawyers is the statement of the law itself. The question was whether Uber provides transport services or digital services as a platform linking customers to drivers – in other words, an ‘information society service’ in EU law. The answer determines which set of regulations apply – local taxi rules or the EU directives on information society services and electronic commerce.

Unsurprisingly, Uber argued that it was a digital service; the taxi company took the opposite view. In the oral hearing last November, the Netherlands, where Uber has its European headquarters, and the European Commission, which is poised to legislate on this matter, sided with Uber. France and Spain shared the taxi company’s views.

The argument was complex. The AG stated that Uber is a composite service, since part of it is provided by electronic means while the other part is not. He had to decide whether the non-electronic part was economically independent of the electronic, as with flight and hotel booking websites, or whether the electronic was the main or decisive part. In either case, Uber could be judged to be a digital service. But, essentially because of the control it retains over drivers and because physical transport is the main supply, it failed the test to be considered a digital service and so was considered a taxi service. It must therefore follow local taxi rules.

This is the crucial statement: ‘A service that connects, by means of mobile telephone software, potential passengers with drivers offering individual urban transport on demand, where the provider of the service exerts control over the key conditions governing the supply of transport made within that context, in particular the price, does not constitute an information society service.’

The second outcome for lawyers is obvious: this is not only about Uber. There are many giant electronic platforms providing similar services. Airbnb is one, as are food delivery services such as Deliveroo and UberEATS. The business model and profitability of many large companies depend on the result.

It will likely decide whether electronic platforms offering legal services are themselves digital services and so not bound by national and bar rules.

But we must bear in mind that, even if the court finally agrees with the AG, the European Commission may still decide to legislate in favour of Uber’s position. It is keen to keep Europe at the forefront of what it sees as the benefits of the ‘gig’ economy: ‘Online platforms drive innovation and growth in the digital economy,’ it announced just a few days ago. It is also reported that the commission had hoped the court would do its dirty work for it in the Uber case, thereby allowing it to avoid responsibility for the decision at a time when the EU is trying to avoid controversy.

The third outcome is the importance of this decision for the legal services sector. Some European bars have been holding their breath awaiting the result, since it will likely decide whether the growing number of electronic platforms offering legal services of various sorts are themselves digital services, and so not bound by national and bar rules on delivery of these services – or whether they are bound by local regulation, as the AG thinks Uber should be.

Clearly, the first step is for the framework of the Uber opinion to be studied to see whether the circumstances are the same. For instance, are legal services a composite service and how do the elements of the composite service relate to each other? If the court agrees with the AG, the tests will be whether the platform is sufficiently independent from the service provided, and whether the essence of the supply is an electronic or a physical service.

On this point, the trend is encouraging and we must hope that this is one of the cases where the AG’s opinion is followed.

Jonathan Goldsmith is a consultant and former secretary-general at the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs