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EU court to Uber: Face it, you're a transport service

Europe's highest court says the ride-hailing company should be regulated differently. This decision could have major ramifications for Uber.

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Uber faces trouble in Europe after EU court rules it should be regulated as a transportation service.

Andrew Hoyle/CNET

Uber has long said it's a technology company, not a transportation service, so it shouldn't have to follow the same rules as transport companies. But Europe's highest court disagrees.

In a setback to the ride-hailing company, the European Court of Justice ruled Wednesday that Uber is a transportation service --  like taxi or black car services. That means the company could be regulated differently in the European Union's 28 countries.

In most countries, the laws around Uber are lighter than those that dictate transportation services. So Uber may need to shift its business model to abide by new regulations.

Uber "must be classified not as 'an information society service' but as 'a service in the field of transport'" the court said in statement.

This ruling could have bearing on Uber's ongoing battles with regulators around the globe. In many countries, the company has set up shop before asking local governments for permission to operate. That aggressive strategy has helped Uber grow from a small San Francisco startup to a multinational service operating in about 75 countries. But it's also gotten it in trouble with governments along the way.

Uber has clashed with regulators from the US to India to Brazil. In Europe, the company has faced resistance from lawmakers in the Netherlands, France, Germany, Ireland, Belgium and other countries. Most recently, in September, the city of London revoked Uber's license to operate in an on-going dispute.

For its part, Uber says the court's ruling won't really change how it operates in the EU.

"This 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," an Uber spokesman said in an emailed statement. "As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialogue with cities across Europe."

The European Court of Justice case has its roots in a 2014 battle between Uber and Spanish taxi company Elite Taxi. At that time, a Spanish judge ordered Uber to end all operations in the country, saying its drivers had no official authorization to operate and unfairly competed with licensed taxis. The judge then referred the case to the European Court of Justice in July 2015. Uber began operations in Spain again in 2016 abiding with local regulations.

In a tweet on Wednesday, Elite Taxi said, "Thank you to everyone for believing in our professional Elite Taxi association, today the cabbies have beaten a Goliath #Uber."

Update, 12:56 p.m. PT: Adds comment from Uber spokesman.

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