The European Court of Justice ruled Uber is a transportation service and must be regulated as a taxi company by EU member states, with the ride-hailing service provider insisting the development won't significantly affect its operations on the Old Continent.
The ruling from Europe's highest court found that Uber "must be regarded as being inherently linked to a transport service and, accordingly, must be classified as "a service in the field of transport".
"As our new CEO has said, it is appropriate to regulate services such as Uber and so we will continue the dialog with cities across Europe".
The decision clarifies for the first time that connecting people via an app to nonprofessional drivers forms an integral part of a transport service.
Uber insisted that the ruling would have no impact on the way it operated in the United Kingdom and most other European countries where it was already subjected to local taxi regulations.
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Harford has worked for and competed with Khosrowshahi, 48, in the online travel business.
The ruling says that as a transport service, Uber will be excluded from the scope of the freedom to provide services in general as well as "on services in the internal market and the directive on electronic commerce". Regulations for companies in this category are very favorable in Europe. It's the last thing that Uber needed this year, especially when you consider the turbulence that the company has gone through in 2017.
The decision in theory applies to ride-hailing services around the 28-nation EU.
Reuters says the decision will not have an immediate impact on Uber's operations, as the company has cut back the use of unlicensed services like UberPOP. "Without transport services, the business wouldn't exist".
In France, Uber's low-priced service involving independent, unregulated drivers is already banned as the result of legal challenges, but Uber operates a popular ride service involving licensed drivers that competes with traditional taxis and charges similar but more flexible rates.
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Taxi drivers honked their horns in central Barcelona to celebrate the victory. Traditional taxi firms, whose drivers have protested in dozens of cities, have welcomed the ruling.
"This is a vindication of our continued assertion that Uber is much more than an online platform", said Ruwan Subasinghe, a legal officer for the International Trade Union federation of transport workers.
The company has rejected that argument, saying it will harm innovation.
In an emailed statement to TechCrunch, an Uber spokesperson says that this ruling will not affect Uber's operations in most European Union countries, where the company already complies with transport laws.
"After today's judgment innovators will increasingly be subject to divergent national and sectoral rules", Jakob Kucharczyk, of the Computer & Communications Industry Association, told Bloomberg. The EAT upheld the employment tribunal's ruling and dismissed Uber's appeal.
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Uber has also experienced a sexual harassment scandal.