EU court advises challenge to Uber business model

Uber provides a transport service and must be licensed, an adviser to the European Union's top court said on Thursday, in a potential blow to the US firm which says it is merely a digital enabler.

LUXEMBOURG (REUTERS) The EU's top court has applied the brakes to Uber's ambitions in Europe, recommending that the US firm provides a transport service and must be licensed.

It's a blow for the ride-sharing company, which claims it is merely a 'digital enabler' - allowing it to bypass strict local licensing and safety rules.

Though a non-binding opinion, the determination by the Court of Justice is followed by its judges in most cases and a ruling can thus require Uber to obtain local licensing and authorisations.

The case was brought by an association of Barcelona taxi drivers - the latest group to take Uber to court since the company expanded into Europe five years ago - arguing it has created an unfair market.

"Consumers will be affected because launching peer-to-peer car-sharing services such as UberPOP will be, could be made harder, if a final ruling comes down, and it could. Uber X, which is the licensed service, could be a little bit more expensive as a result of added regulations and safety requirements, and so yes we could see Uber X slightly hampered in its expansion and therefore less availability for consumers," said Reuters transport correspondent Julia Fioretti.

In a statement, Uber said it would await the final ruling later this year, but added it wouldn't change how it is already regulated in most EU countries.

But warned such a ruling would "undermine the much needed reform of outdated laws which prevent millions of Europeans from access a reliable ride at the tap of a button".

Once again, showing that this rapidly growing company has no intention of being knocked out of the fast lane.