#131 Uber and Out?

In a previous blogpost, I have written about global ride hailing company Uber’s woes in overseas markets such as China or Colombia. Just recently – on December 20th (2017), to be more specific – the European Court of Justice delivered a nice lump of coal to Uber for Christmas. The European Union’s highest court ruled that Uber will have to be regulated just like any other transportation company. Uber’s argument that they are not providing transportation services, but only an exchange platform or a marketplace that connects supply and demand, didn’t fly with the judges. That doesn’t necessarily mean that Uber’s international expansion or its services will come to a grinding halt, but it’ll make the company’s operations much more complex. For one, transportation is regulated by individual countries, sometimes even down to the municipal level. This means that Uber will now have to deal with a large number of state and local government authorities who are most likely to apply the same rules to Uber that they apply to taxi operators or transportation service providers. That will make adoption among both drivers and riders slower, and it will put a dent into Uber’s growth. Some of Uber’s services have already been banned (for instance, Spain 2014, Germany 2015, Netherlands 2015, Sweden 2016) or suspended (for instance, France 2015), and in other markets Uber has no services at all after they were suspended (for instance, Hungary 2016) or simply never tried (for instance, Austria). And while the ruling only applies to EU countries, other countries in Europe and elsewhere around the globe may get inspired by the court’s decision. There may be even more far-reaching implications of the ruling for similar exchange platforms outside of ride hailing and ride sharing. This is a good testimony to the fact that a little longer than a decade after Thomas Friedman proclaimed that “The World is Flat”, barriers to international markets continue to exist.

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