"The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport", said the Luxembourg-based European Court of Justice. He said it is too early to say which other companies might be affected but called the overall message from the ruling worrying for startups.
A decision Wednesday by Europe's highest court hands a big win to these often decades-old groups and organized labor - and represents a black eye to the San Francisco based-ride sharing app. The governments can also ban the company from operating within their borders if they see fit.
The EU ruling is separate from a string of ongoing legal challenges Uber has faced around Europe and the world, including in Britain.
The decision stands to increase legal risks for other "gig-economy" companies - including Airbnb - a growing part of the workforce, in which people operate as freelancers or on short-term contracts as opposed to holding permanent jobs.
Almost a third of Uber's 50,000 United Kingdom drivers are logged into the app for more than 40 hours a week, and around 8 percent are logged in for more than 60 hours, the company said in a letter to government officials.
"It will however hurt the necessary reform of outdatedlaws which prevent millions of Europeans being able to find a reliable ride with just one click", the spokesman said.
Uber has faced a number of legal challenges in the European Union over the last few years.
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The matter attracted legal attention when Uber was told to follow local taxi rules in Barcelona. The case largely targeted UberPop, a peer-to-peer service that literally converts anyone with a auto to a cab driver. But the judgment dashes any hopes of regulatory rollback in those jurisdictions and could embolden regulators to impose more onerous restrictions on the company. But it's still operational in other countries including Finland, Poland, Estonia, and Czech Republic.
Uber says that it's simply an app that connects passengers with drivers. "Member states can therefore regulate the conditions for providing that service".
Uber argued in its defence that it is not just a ride-providing service instead it has a technology platform via which passengers are connected to independent drivers.
In short, this means Uber will now be officially recognised as a cab company rather than a technology company.
The ruling by the European Court of Justice will change everything.
To start with, Uber was hit with a sexual harassment scandal a few months ago. Khosrowshahi's arrival marked a change in tune at the top of the company, but the new CEO still has to fix plenty of problems created by the former leadership. But the biggest blow came from the United Kingdom where the ride-hailing service lost its license to operate in London. There is an increased optimism that the new leadership could steer the ride-hailing company into more prosperity in the future. "Without transport services, the business wouldn't exist".