The European Court of Justice ruled Uber is a transportation service and must be regulated as a taxi company by EU member states, with the ride-hailing service provider insisting the development won't significantly affect its operations on the Old Continent.
Uber has always denied it was a transport company, arguing it was an aggregator connecting drivers and passengers via an app. The verdict is a long-awaited judgment expected to have major implications for how Uber is regulated throughout Europe.
These drivers claimed to be workers, and said Uber had failed to comply with its legal obligations to provide them with national minimum wage and holiday rights, and that a driver was dismissed for raising a complaint about the risk of drivers using false insurance documents.
Prof Andre Spicer, from the Cass Business School, welcomed the ruling.
The company says most of its products are already covered by such regulations.
2017 just isn't Uber's year. However, the company will need to re-strategize in Europe now that its status as a digital service has been changed to a transport service.
An Uber spokesperson said: "This ruling will not change things in most European Union countries where we already operate under transportation law".
Instead, it's an app that acts an intermediary between drivers and customers looking for rides.
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Poland, Czech Republic, Slovakia and Romania are the only countries where the company still offers such peer-to-peer services, and where Wednesday's ruling might have a direct impact.
"It was about time to put an end to the unfair competition of the gig-economy companies that are no more than killer whales in a fish tank", said Raul Lopez, a taxi owner who has been driving the streets in the Mediterranean port city for 17 years.
"After today's judgmentb innovators will increasingly be subject to divergent national and sectoral rules", said Jakob Kucharczyk, of the Computer & Communications Industry Association, which speaks for companies like Uber, Amazon.com Inc., Google and Facebook Inc.
The Barcelona-based law firm representing Elite Taxi, the association that filed the lawsuit, also hailed the ruling.
Rachel Farr, a Taylor Wessing employment, pensions and mobility professional support lawyer, said the ECJ's decision was "bound to make the forthcoming appeal harder for Uber by removing one possible argument it may choose to run".
"The goal of those rules is to make sure online innovators can achieve greater scalability and competitiveness in the European Union, unfettered from undue national restrictions", Jakob Kucharczyk, vice president for European Union policy at the Computer and Communications Industry Association, told Reuters.
The ECJ's ruling gave additional credence to such decisions, posing a real threat to Uber's future growth plans.