Uber driver Harouna Kaba protests during a September rally in New York City (Drew Angerer / Getty Images)For Uber, the election of Donald Trump may have come not a moment too soon. Last Tuesday, as protesters across hundreds of US cities called for the minimum wage to be raised to $15, they counted a new faction of workers among their ranks: Uber drivers. In some two dozen cities, drivers left their cars idle and ignored ride requests as they marched alongside fast food workers, airport employees, and domestic workers, demanding an increase in the federal minimum wage and better work standards from their employers. The catch, of course, was that legally speaking, Uber drivers are their own employers, as Uber has adamantly maintained that it offers a platform to connect customers and independent contractors—nothing more.
That Tuesday was a big day for Uber. As hundreds of drivers stateside ditched their cars to march, lawyers for the company were headed to the European Union’s highest court to argue that it shouldn’t be subject to the same strict regulations that govern taxi operators in EU member states.
It would appear to be a watershed moment for the ride-sharing goliath. Legal challenges are piling up around the globe. Uber is currently facing some 70 lawsuits in the US alone, and has run into numerous regulatory hurdles abroad—and this is the first time that one has made it to such a high court. The same questions that have plagued Uber since its launch are at issue today: is it a pure technology company? Or is it in some way responsible for the drivers using its platform? As Uber battles worldwide challenges to its autonomy, the company might find an unexpected ally close to home: Donald Trump, and an administration inclined to leave businesses alone.
It’s been two years since Uber started losing ground in Europe to regulators. The company had been operating its low-cost, unlicensed service known as UberPOP in Spain for several months when, on December 9, 2014, a Madrid judge ruled that the company was competing unfairly and would have to suspend its operations. Uber argued that the ban was “inconsistent with broad political acknowledgment in Spain and across the European Union on the benefits of sharing economy services,’’ but it was nonetheless forced to suspend services in Spain a couple weeks later.
That was just one of many legal battles Uber was fighting on the continent at the time. Between 2014 and 2015, UberPOP was banned in the Netherlands, Germany, France, and Italy, among others. Uber had taken the same approach to rolling out its services abroad as it had in the US, operating within a legal grey area and hoping for the best—but the pushback it was receiving in the EU was intense.
“It’s a highly sensitive issue in the EU,” says Damien Geradin, a Brussels-based lawyer who has been closely following Uber’s legal battles in Europe. “It has created a lot of tension because the taxi unions are very strong; because governments are scared. Young professionals love Uber, and there’s a demand on local authorities and governments to allow Uber…but then on the other hand you have people who tend to be [averse] to large American corporations that might in their view destroy jobs, social security, and so on.”
A little over a month before that December ruling in Madrid, a swell of anti-Uber sentiment in Spain brought a similar case before a court in Barcelona. At issue was whether Uber was competing unfairly by shirking the regulations that apply to taxis and private hire vehicles. The judge in that case wound up asking for guidance from the European Court of Justice, roughly analogous to a state-level case in the US making its way up to the Supreme Court: Any decision made by Europe’s highest court matter would establish, once and for all, how Uber has to operate in EU member states.
Uber has since returned to Spain—this time playing by the rules as a fully licensed cab service—and last week, the EUCJ took up that million-dollar question: is Uber a transportation company, or is it what the EU calls an “information society service?” The European Commission (the EU’s executive arm) has lent its support to Uber, arguing in recently released guidelines that member states shouldn’t impose undue restrictions on sharing economy companies, but the court itself isn’t expected to make its decision on this case until next year.
If the EUCJ rules that Uber is a transportation company, not much will actually change for Uber in Europe. After the massive backlash to UberPOP, Uber discontinued the service across Western Europe, and now only offers rides from professionally licensed drivers. A negative ruling for Uber, according to a company spokesperson, would essentially mean that it has to keep doing what it’s doing, licensing drivers and operating within what the company admits is an inconvenient—but not devastating—regulatory framework. In other words, a ruling against Uber, while frustrating and bad for optics, won’t do all that much to dent its global ambitions.
A scaled-up version of this debate is playing out in the US, where the issue is not whether Uber is behaving fairly with taxis and car services, but with the drivers themselves. The issue has been getting some driver-friendly momentum globally as of late: a UK court recently ruled that Uber could no longer classify its drivers as self-employed, while in the US, a New York court found in October that two former Uber drivers should be eligible for unemployment payments and not be treated as independent contractors. Meanwhile, the massive class-action suit involving 385,000 drivers in California and Massachusetts has been put on hold, after a judge rejected the proposed $100 million settlement this summer on the grounds that it did not compensate drivers enough.
“I think this is a battle we’re going to see played out in different areas,” says Shannon Liss-Riordan, the lawyer spearheading that class-action suit. “It may be at some point that enough rulings come together that might change the momentum, if Uber is challenged enough.”
Liss-Riordan’s suit is now pending before California’s Ninth Circuit appeals court, whose ruling could open the floodgates to further class action from Uber drivers. The National Labor Relations Board, the federal labor protection watchdog, recently threw its weight behind drivers by arguing that a clause of the agreement Uber asks its drivers to sign is in fact unlawful. If the court agrees, drivers will be emboldened: the clause sought to annul their right to pursue collective legal action against the ride-sharing company.
But that may be the last bit of driver-friendly action we’ll see from the US government in the coming years, as a hands-off administration comes into power.
When Donald Trump appointed Elaine Chao to the position of Transportation Secretary—also last Tuesday—Uber federal affairs head Niki Christoff appeared to welcome the selection, stating that Chao’s “knowledge of transportation issues is extensive and we look forward to working closely with her.” Chao, who previously served as Secretary of Labor under George W. Bush, has expressed her support for minimal regulation in the sharing economy, arguing at a talk last year that “government policies must not stifle the innovation that has made this sector such an explosive driver of job growth and opportunity.” Andrew Puzder, the fast food executive that Trump nominated yesterday to be Secretary of Labor, has also been hailed as a win for gig economy companies like Uber.
Yet even more relevant to the future of Uber could be who Trump appoints to the NLRB. The board currently leans Democrat, but Trump will be able to make three appointments that will almost certainly flip it Republican—and that could happen extremely quickly, according to Benjamin Sachs, who is the Kestnbaum Professor of Labor and Industry at Harvard Law School. Such a board would likely be loath to intervene on the side of workers in the sorts of lawsuits being brought against Uber. And it might even go farther: Says Sachs, “It seems to me quite plausible that a NLRB under President Trump might see the law differently than I do and determine that Uber drivers are not employees within the meaning of the [National Labor Relations Act].”
This thus leaves Uber in a strange position as the Trump presidency looms. It can hardly endorse the new administration for fear of infuriating the large swaths of its customer base situated in liberal-leaning cities—but it also is likely to benefit from a regulation-averse party being in control. And if the EUCJ winds up following the European Commission’s thinking and ruling against regulating Uber like a taxi company, then the next few years could be relatively smooth sailing for the ride-sharing company—and bad news for anyone hoping to see it falter.