Recent decision of the Court of Justice of the European Union that Uber is a transportation company represents a short-term win for the European taxi branch. It empowers the national governments to regulate not only on Uber but also to perform similar actions on new digital services and applications. One can say that “ the future cannot be banned“ and for the EU it matters since sharing economy enables European consumers to develop new peer-to-peer relations.
When Uber started operating within the EU it immediately faced resistance and criticism. Parts of the criticism were justified in the sense of consumers worrying about the drivers working conditions. Such criticism is important as it offers companies the possibility to change and improve. Markets are namely not only regulated by official measures, they are also informally regulated by the consumers` feedback. However, the actions that were performed by the taxi lobby in the EU towards Uber indicate several problems.
First of all, in a market economy there should be as much open space as possible for the competition between the economic actors. Demanding government intervention, as in case of banning Uber or imposing restrictions, shows that the corporatist behaviors can occur. In Sweden, where the government prohibited the Uber Pop, the taxi lobby actors went so far by arguing that Uber was threatening the welfare state. Such behaviors include the risk of business actors searching for a special treatment and benefits from the politicians and lawmakers.
Secondly, restricting Uber or kicking it out from the competition presents a risk that can lead to conservation of the older habits and thereby reduce the possibilities for new innovation. During the latest years, the EU governance focused, among the other things, on communicating about shaping the digital economy. Making it harder for apps as Uber to operate within the union sends the negative signals to the digital sector. One positive example is that Uber operates in Tallinn and thereby empowers the narrative of Estonia as a digital country. As one of the lawmakers expressed: “Old technology should be in a museum and not protected on a state level”.
Thirdly, it is about the development of the information society that goes hand in hand with the development of the gig-economy. The judgment was that Uber had to be classified not as an information service but as a transportation service. That can lead to developing bad regulatory frames with eventual negative consequences during the later stages, having in mind the current discussions about the fourth industrial revolution with further digitalization and robotization. Good economic governance should be about making it easier for consumers to conduct peer-to-peer relations and interaction.
A possible solution, when it comes to services which companies as Uber are offering, would be to apply more of economic federalism within the EU. Instead of regulating Uber on the state levels such decisions should be made locally. This would offer possibility for the local governments to make choices, being based on the public opinions, about allowing or prohibiting the usage of digital services. This would also have a less negative imaging and setbacks for the EU as an attractive “digital single market” and also provide a compromise between economic possibilities and public interests.
Taxi transport represents an older European tradition and views about services and consumer interaction. With apps as Uber customers can still find it easier to share a ride with another person if there is a mutual interest of doing so. Sharing economy and “uberisation” with apps as Deliveroo and AirBnB offer modern development with innovation is a key segment. Through economic federalism that goes in hand with competition, experimentation and diversity the policymakers in the EU should not fear uberisation but welcome it as a possibility to decentralize economic governance that also would benefit further innovative development.