Credit: Alexander Torrenega/Wikimedia

Uber's defeat in France won't be the sharing economy's last legal upset

The distinction between people and businesses is getting narrower.

by Jack Torrance
Last Updated: 26 Nov 2015

Uber's latest setback in France doesn't come as much of a surprise. The country's constitutional court has rejected its appeal against the government's banning of UberPOP, its low-cost servive that connects customers with drivers without a professional taxi or chauffeur licence.

UberPOP arguably offers a similar service to the likes of France's own BlaBlaCar, which is meant to be all about helping everyday people who are already planning a long car journey to keep the costs down by taking some extra passengers along. But the court said that such schemes were easily distinguishable from services like UberPOP, because they aren't supposed to be for the purpose of generating a profit.

'While this is a disappointing judgement for Uber, Heetch and other French ridesharing companies, it will not impact the service we offer in France today which is provided entirely by professional drivers,' an Uber spokersperson said (UberPOP has been suspended in the country since violent protests in June). 'We will continue to work with the French government on new, common sense regulations that offer riders more affordable, reliable options and drivers new job opportunities'. 

Though France's treatment of Uber has generally been excessively heavy-handed, its banning of UberPOP isn't totally unjust. Even if they don't want to pay metered taxi prices, a lot of people do expect drivers to be background-checked and fully licenced (as Uber's other drivers are).

What the ruling does touch on, though, is the difficulty distinguishing between individuals and profit-making businesses that the 'sharing economy' has created for regulators. The accomodation website Airbnb and its ilk have faced similar problems – where do you draw the line between a person charging a stranger to sleep in their house and a professional bed and breakfast – and all the regulations and taxes that implies? Last year, New York's Attorney General vowed to crack down on 'illegal' Airbnb listings, a move that appears to have stunted the startup's growth in the state.

The 'Uber model' has also been criticised for its impact on workers. Uber regards its drivers as 'partners' rather than employees, and working as freelancers means they are not eligible for sick pay and other benefits. This has been challenged in California, and could come to court in the UK. Those looking for work on 'peer-to-peer' platforms like Taskrabbit and cleaning start-ups like Hassle are in a similar situation. Rightly or wrongly, more of the 'jobs' being created today are less secure than they used to be. 

That's a trend that's likely to continue as sharing economy entrepreneurs come up with increasingly inventive ways to reduce prices by cutting out the middle man. The controversy this creates will embolden established businesses and rankle politicians, so don't be surprised to see more legal battles like Uber's emerge in the future.

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