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Leonid Bershidsky

Why Uber’s Struggling to Remain a Tech Company

A likely European court ruling will define Uber as a taxi firm -- until its cars drive themselves.
A bad ruling for Uber in Europe.

A bad ruling for Uber in Europe.

Photographer: Oli Scarff/Getty Images

It is now highly likely that the European Court of Justice will later this year reject Uber's fiction that it's simply a marketplace that brings together drivers and riders by declaring it -- gasp! -- a taxi company. That may not hurt it much financially, but it will set an important precedent: Companies that have a software development operation are not entitled to special treatment.

ECJ Advocate General Maciej Szpunar has submitted an opinion to the court, saying Uber is not an intermediary matching supply with demand but "a genuine organiser and operator of urban transport services," which itself creates the supply. Szpunar's argument is a clever spin on Uber's (likely accurate) boast that it doesn't just take away business from existing taxi services but expands the market. "Drivers who work on the Uber platform do not pursue an independent activity that exists independently of the platform," the advocate general wrote. "On the contrary, the activity exists solely because of the platform, without which it would have no sense."