French riots

Mega-Fight for Uber Taxi

epa04817766 An UberPop vehicle overturned by French taxi drivers as they clash with riot police, during a demonstration against the app-based transportation network and taxi company Uber's UberPop service in Paris, France, 25 June 2015. The protest caused traffic disruption in Paris and its region. Despite a law making UberPop service illegal, the US-based company continues to develop in French cities, provoking reactions of taxi drivers. EPA/IAN LANGSDON +++(c) dpa - Bildfunk+++
Protest in France over the question of who can provide ride services.
  • Why it matters

    Why it matters

    If courts decide Uber’s drivers count as employees, this will cost the company more money and challenge its business model – and may mean major changes for other, similar businesses.

  • Facts

    Facts

    • Uber says it’s active in about 55 countries and 300 cities worldwide.
    • The  firm’s methods have drawn protests by drivers and crackdowns by some governments.
    • A top European Union official said the European Commission will present new rules this year to regulate and enable new online businesses such as Uber to work more smoothly across the region.
  • Audio

    Audio

  • Pdf

Consumers love it for its convenience, speed and lower prices, but Uber, the U.S. car sharing platform that may or may not be a taxi service, is clearly the Public Enemy No. 1 among licensed cab drivers in most of the world.

Last week, the battle between cab drivers and their biggest competitive threat spilled over into violence in France.

During a demonstration, taxi drivers in Paris overturned an UberPop vehicle — a private car used by one of Uber’s non-licenced drivers — during a clash with police.

UberPop has been ruled illegal in France, but taxi drivers believe UberPop drivers are ignoring the law.

On Tuesday, French authorities intervened, against Uber.

Police indicted the top two Uber executives in France on a range of charges including allegations of providing illegal ride-sharing services.

The arrests were simply one more step in Uber’s long running battle with taxi companies and local authorities around the world.

From South Korea to the Netherlands, people are asking whether private, ad hoc drivers that the company provides in its service called UberPop, or UberX in the United States, through a ride-sharing app, should be required to obtain  official permission to convey passengers.

In Germany, opposition from taxi drivers led the Frankfurt District Court to order that Uber drivers must be accredited as taxi drivers by conventional means, which would undermine the U.S. company’s business model of using non-professional drivers.

It was a setback for Uber, which is about five years old and aggressively expanding. The company’s challenges also continue at home, over the issue of whether Uber’s drivers are independent contractors or employees.

The California Labor Commission earlier this month recognized the existence of an employee-employer relationship within the company.

The status of drivers may call into question the core of the business model not only of Uber and its competitors such as Lyft but also including Airbnb and other similar service providers that are part of the sharing economy.

Uber objected to the California ruling vehemently, saying the decision wasn’t generally applicable and will be appealed. Drivers have “complete flexibility and control” regarding their rides and are therefore independent entrepreneurs, the firm said. The governmental authority previously held to this opinion and was now contradicting itself, Uber added.

Similar issues are being raised not only about Uber but also its competitor Lyft and providers of household services and package delivery, for example.

Most of the time, the largely digital platforms argue they are simply bringing supply and demand together and actually don’t have anything to do with the core service, which is provided by independent contractors.

Hence Uber and the likes are not employers.

The employment status of the people who provide rides and other services is important. According to a law firm in Boston, hundreds of drivers are attacking Uber via a class-action lawsuit. The drivers seek clarification about whether they are employees and have a right to reimbursement for gasoline and repair costs.

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