Dec. 20 (UPI) -- The European Union's top court ruled on Wednesday to classify Uber as a transportation service -- a major setback for the ride-hailing company.
In a decision that cannot be appealed, the EU Court of Justice ruled that Uber's app-based ride-booking services should be regulated as a taxi service would be -- even when drivers use their own personal vehicles and aren't professionals.
The ruling clarifies that connecting people via an application on a mobile device or computer is part of a transportation service -- whereas Uber views itself strictly as a digital service.
"The service provided by Uber is more than an intermediation service," the judges said in their ruling, noting the company "must be classified as 'a service in the field of transport.'"
The EU court placed itself on the side of traditional taxi services with the ruling -- restricting Uber from expanding "peer-to-peer services" that allow anyone with a car to drive for the company.
"The most important part of Uber's business is the supply of transport -- connecting passengers to drivers by their smartphones is secondary," Rachel Farr, senior employment lawyer at law firm Taylor Wessing, told Bloomberg.
"Without transport services, the business wouldn't exist."
Uber says the EU ruling will not regulate how it operates in most European countries, however, where it already complies with transportation services rules.
The European ruling is based on a complaint by a Spanish taxi services group in 2014 that claimed Uber provided unfair competition against traditional taxi drivers because they didn't have to adhere to the same rules.
Last month, Italian taxi drivers went on strike to protest advantages companies like Uber and Lyft had over traditional transport services.
"We can't allow for a business model to develop in Europe that could undermine the rights of consumers," Montse Balagué, a lawyer for the Spanish taxi association, told the European Court of Justice last year.
"We must not be misled by labels. If there's a transport service provided, then a company can't hide behind a thin veil, calling itself a different service."
