II. What real effects has the UBER case judgement on each platform?
It’s good fishing in troubled waters …” as the saying goes,
or if you prefer Catalan “Stir it up, it will make you strong!…
In the end, the fact is that every time some transcendental news arises, competing companies dive in to see if they can “get one over” and manage to confuse people.
If there is a sector where confusion may be generated, due to the difficulty to define the terms under which we move, that is precisely the platform economy sector.
Due to this, it is worth taking time to evaluate what the real effects are (not those claimed by competitors) regarding the judgement handed down yesterday by the Court of Justice of the European Union in Luxembourg (CJEU) or European Court of Justice (ECJ) in the UBER case (on which we published this post) on each one of the main platforms, whether of the collaborative economy or otherwise.
Effects of the ECJ Judgement on:
The CJEU Judgement states that the intermediation activity by UBER lies within its principal and global activity of transport, so it must be ruled by the transport regulations.
If UBER were to continue to operate the UberPOP service (private vehicles with private drivers without licences) this judgement would have an enormous repercussion on its operations in Spain.
Notwithstanding this, as the CJEU Judgement only concerns one company, UBER, that is only providing services under the UberX mode in Spain at present (with professional drivers who hold VTC licences) it does not cause appreciable effects, as UBER is already complying with the transport regulations, as it has drivers with VTC licences.
And why then do taxi drivers say UBER and Cabify are breaking the law?
That is another completely unrelated matter.
This refers to their claim to a quantitative restriction of 1 VTC licence for every 30 taxi licences in force at the time the licence is granted, being fulfilled at all times (in spite of the liberalisation period pursuant to the Act for transposal of the Services Directive 2006/123 in 2009).
The fact is that such a quantitative restriction is only fulfilled at the time of the licence being granted, so the present ratio “in the street” is much lower than that established by the Land Transport Organisation Regulations (LTOR) at the time the licences were granted. Note that this is not due to any regulation whatsoever being breached, but rather due to fulfilment of successive laws over a period of time, as is recorded in greater detail in this post.
What is stated above for UBER may also be affirmed for Cabify.
Moreover, the company Cabify has a vitally important precedent: the judgement of 13th June 2017 by Mercantile Court no. 12 of Madrid, that specifically affirms that:
- Cabify is not a transport company
- Cabify does not perform acts of unfair competition (as it requires the drivers to abide by the regulations governing the activity they perform).
The Judgement by the CJEU regarding UBER does not in any way affect the French company BlaBlaCar, as its business model is pure collaborative economy, without the company participating in the juridical relation between its users.
Moreover, BlaBlaCar has the precedent of the Judgement of 2nd February 2017 by Mercantile Court no. 2 of Madrid, to which we referred in our post, and that specifically affirmed that:
- BlaBlaCar does not provide transport services, but rather information society services,
- and thus, BlaBlaCar cannot compete unfairly with companies in the transport sector.
Yesterday, as soon as the CJEU Judgement was published, the hoteliers rushed to publish in the “troubled waters” with news such as this.
However, nothing could be further from the truth.
In a similar manner to BlaBlaCar, the CJEU Judgement on UBER does not in any way affect the American company Airbnb, whose business model is pure collaborative economy, without the company participating in the juridical relation between its users.
Airbnb also has a valuable precedent, that of the Judgement, in this case handed down by the contentious-administrative courts, dated 29th November 2016, in the appeal that Airbnb won against the Government of Catalonia over the first fine it issued due to it understanding that the firm provided an accommodation service without holding the relevant licence, that we examined at length in this post.
In that case, the Court went further and warned the public powers that it is impossible to impose “prospective penalties” to cover claimed loopholes in the law, as if these were to be contrary to the law, the Public Administrations would also be bound to compensate the damage.
What has been said for Airbnb may apply to this platform. It is not affected by the CJEU Judgement.
Deliveroo, Glovo …
These companies are affected by the CJEU Judgement on UBER Why is that the case?
Because the Judgement, as stated yesterday this other post, bases its argumentation on two key points:
- UBER exerts a on provision of the underlying service (setting the price and essential conditions of vehicles and drivers) and
- That the intermediation service by UBER must be considered included in the main activity of transport.
Now the European Commission, in its Communication of 2nd June 2016 “The European Agenda for the Collaborative Economy” defined the criteria according to which one may understand a decisive influence to exist. And along with that of setting the price and essential conditions, there was also that of the labour relations between the company and the workers.
Thus, there might be major probabilities that, after the Inspection Proceedings by the Labour and Social Security Authorities of Valencia on 11th December 2017, that concluded that the delivery riders taking food to homes for Deliveroo are not freelance workers and that the company “disguises” a real labour relation, and without prejudice to the results of subsequent appeals announced, such companies may be considered by a Court to below bound to the delivery riders by a labour relationship and, thus, subsequently consider there is a decisive influence by the company regarding these, so the consequences would be similar to those foreseen in the UBER Judgement.
With regard to the rest of the platforms, the analysis is simple:
- It will be POSITIVE for collaborative economy platforms that do not exert any kind of decisive influence over the providers of the underlying service.
- It will be NEGATIVE for platforms that exert any kind of decisive influence over the providers of the underlying service.
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