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There is great dispute and questioning about what is Uber? Essentially, Uber is the middle man between independent workers and the consumers. In regulatory term, European Court of Justice will deal with the case of Uber, which has been an ongoing dispute between Uber and European Regulators (Schrieberg, 2016). According to EU law if Uber is a digital IT services provider they can set up and operate freely across the EU, under a 2006 article of EU legislations (European Parliament, 2016). However, if Uber is a transport company they would need to have more regulations, and may even be blocked from operating in the 28 member states (Robinson and Murgia, 2016). The hearing will be of 15 judges examining Uber’s case, and the EU member states that would like to impose rules on Uber (Robinson and Murgia, 2016).
Uber have had a number of court cases against them (Schrieberg, 2016), however, they have now tried to work with national governments in finding a middle way that works for them, and for the national governments. It is important to note that this case focuses specifically on what Uber actually is, is it a transport company or is it a digital IT services provider, or something in the middle. Ramifications of this case could affect how it is dealt with by government across Europe in the future, and companies that are similar, such as, Air BnB or Deliveroo. Most customers are hoping for a successful result on Uber’s part, as people are saving more money than to use other taxi services (Schrieberg, 2016). The downfall of Uber is that workers are not entitled to minimum wage, but on the other hand, Hall and Krueger, (2015) research paper which examined 600 Uber drivers, found that workers were getting paid more than other taxi drivers. Another downside is that they are not entitled to healthcare benefits or sick pay.
Hall and Krueger paper (2015) suggests that flexibility is one major attraction for drivers to work for Uber, they can choose how much they want to work, by turning the app on and working. They may also pursue another job and then come back to Uber. Benenson Strategy Group (BSG) surveyed shows that 62 percent of drivers have another full-time or part-time job (Uber, 2015), this clearly illustrates Hall and Krueger point that flexibility and convenience is a major factor attracting drivers. In Hall and Krueger study (2015), when participants were asked if they would rather have a 9-5 job with benefits and a set salary, or choosing own schedule. 73% of the 600 sample said they prefer what Uber offers, and overall 78% of drivers were satisfied with what Uber has to offer. This explains the rapid growth of Uber, and how in six years it has surpassed companies like Ford in value (Petropoulos, 2016).
The outcome of this case will undoubtedly have an effect on the sharing economy and how companies like this operate in the future because there will more regulations to prevent companies from participation unfairly in the market. Uber bypasses the substantial regulations that taxi companies are required to follow, such as fixed rates and a licence, which they do not need to operate (Petropoulos, 2016). Uber varies its rates based on demands, when demand is high, prices increases. Petropoulos (2016) is right to argue that Uber has been damaging to the taxi industry, since Uber emerged, prices for taxi licences have dropped majorly. The demand for taxis fell drastically by 65% in San Francisco, two years after Uber surfaced in 2012 (Petropoulos, 2016). This, of course, is destructive and unfair to traditional taxis, Uber is being allowed to bypass laws and regulations, therefore it is only fair that the European Court of Justice decides to imply regulations on Uber. Robinson and Murgia (2016) argue that the reason why Uber has gotten away with following regulations is because they fall between laws and rules.
By Sandra Xheleshi
European Parliament (2016) Freedom of establishment and freedom to provide services | EU fact sheets | European Parliament. Europarl.europa.eu. Available at: http://www.europarl.europa.eu/atyourservice/en/displayFtu.html?ftuId=FTU_3.1.4.html (Accessed: 29 November 2016).
Hall, J. and Krueger, A. (2015) ‘An Analysis of the Labor Market for Uber’s Driver-Partners in the United States’, Industrial Relations Section. Available at: http://arks.princeton.edu/ark:/88435/dsp010z708z67d (Accessed: 1 December 2016).
Petropoulos, G. (2016) ‘Uber and the economic impact of sharing economy platforms’, Brugel, 22 February. Available at: http://bruegel.org/2016/02/uber-and-the-economic-impact-of-sharing-economy-platforms/ (Accessed: 25 November 2016).
Robinson, D., and Murgia, M. (2016) ‘European court takes up the question: what is Uber?’, Financial Times, 28 November. Available at: https://www.ft.com/content/f2774c9a-b566-11e6-ba85-95d1533d9a62 (Accessed: 29 November 2016).
Schrieberg, D. (2016) ‘Uber Has Its Day In Europe’s Highest Court’, Forbes, 28 November. Available at: http://www.forbes.com/sites/davidschrieberg1/2016/11/28/uber-has-its-day-in-europes-highest-court/#5059efce6d8a (Accessed: 28 November 2016).
Uber (2015) ‘New Survey: Drivers Choose Uber for its Flexibility and Convenience’, Uber Newsroom, 7 December. Available https://newsroom.uber.com/driver-partner-survey/ (Accessed: 3 December 2016).