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Is Uber a taxi company? Europe is swaying toward yes

An adviser to Europe's highest court says Uber should be treated like any other transport company. That could spell trouble for the ride-sharing leader.

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Uber was not welcomed in Barcelona by local taxi drivers.

David Ramos, Getty Images

Uber is fighting battles on all fronts, from internal sexual harassment claims to regulatory hurdles the world over.

Its latest setback comes courtesy of a senior adviser to Europe's highest court, who recommended on Thursday that the ride-hailing leader should be treated as a taxi company rather than just an app.

The European Court of Justice in Luxembourg is trying to decide whether Uber should be classed under the heading of "transportation," as part of a case brought against the Silicon Valley company by a taxi firm from Barcelona, Spain. The debate has been going on since November, but as of now it looks like the court could be leaning toward deciding Uber is indeed a transport company.

Whether a country considers Uber to be a taxi company or a digital platform is more than just a matter of semantics. Most countries have strict regulations governing how taxi companies operate -- regulations that could be so difficult for Uber to fall in line with that it might not be allowed to operate at all.

"Uber cannot be regarded as a mere intermediary between drivers and passengers," said the recommendation, issued Thursday by Advocate General Maciej Szpunar to the court. "It is undoubtedly transport which is the main supply and which gives the service meaning in economic terms."

Most people probably know Uber as both an app they tap on to fetch a ride and as the privately owned car that shows up. The 8-year-old San Francisco-based company itself is sprawling, with operations in nearly 600 cities around the world, a widening array of services, such as its UberEats food delivery program, and a valuation pushing $70 billion. Beyond that, its technological ambitions have led it to the development of self-driving cars -- and into a courtroom showdown with Alphabet's Waymo.

Uber may have found favor among its many users, but its aggressive growth strategy has upset the apple cart in many countries. Local governments, regulators and taxi drivers across Europe in particular have clashed with the company as it launched city by city.

A Spanish court banned Uber from operating in Barcelona outright in 2014, before a judge referred the matter on to the European Court of Justice. France and Ireland are supporting Spain's argument, while Finland and the Netherlands believe Uber should be considered, as the company itself argues, a digital service rather than transportation.

Szpunar's opinion is nonbinding, meaning the court does not have to agree with it when issuing a final ruling -- due late summer -- but typically it does follow the recommendations of its senior advisers. If the final ruling echoes Szpunar's decision, Uber will have no choice but to obtain the necessary licenses and authorizations required by national law of member states.

Uber did not immediately respond to a request for comment.

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