Uber’s Fight Part 2
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Uber’s fight in the EU to be considered a digital service suffered a recent loss. The ride sharing app hoped to avoid the stricter regulations by identifying as a digital service instead of a public transportation one. They claimed their service is an online platform for digital exchange and should face fewer regulations than traditional transportation services.
This argument allowed Uber drivers to circumvent the licensing and fees that taxis and traditional private transportation services have had to adhere to. What this means is rather than having a blanket policy enforced by the company, they will have to meet the specific requirements of national and local governments where their service is offered. While Uber claims it already follows most regulations and this ruling will have little affect over their already existing presence in Europe, traditional driving services consider this decision to be a win.
The fight between Uber and taxi services is nothing new. Even in Buffalo, NY ridesharing is still a relatively new phenomenon. While Uber’s pro arguments are based on individual opportunity, the anti-arguments are more to do with standards; standards that are supposed to protect consumers.
Ultimately, it comes down to a freelance economy, where anyone with the means can find a gig and make some income, or a protected economy with established rules that offers those who adhere to the regulations job security. While tech companies in Silicon Valley have been able to fight off government regulation successfully in the United States, these same tech companies have had far less luck in Europe, which enforces much stricter anti-trust policies. The EU claims to do so to fight off monopolies, ensure these companies are paying their fair share of taxes, and to protect the consumers and laborers. While protection is important, it comes at a cost of freedom of choice. Do consumers truly benefit when the number of options available, for products and services, are potentially stifled?
While Uber has faced its fair share of problems in recent months, the legal ramifications of the EU’s decision may affect Uber’s ability to expand the most. While previously Uber has had to deal with resistance in a case by case basis, like London taking away Uber’s ability to operate in its city to uphold corporate accountability, the recent decision by the European bloc is among the first sweeping rulings that affect Uber’s reach to an entire continent.
Views expressed are the opinions of Jeffrey Goldfarb and the Financial Advisors at Goldfarb Financial and not necessarily those of Raymond James.