Ride sharing faces the many European regulations

The sharing economy in the Travel & Tourism industry has seen an interesting development during the last years, both for the number of tourists using its services and for the sector where it can be applied. As we have already reported, these innovative practices in the transport sector had to face some controversies, even if its services are widely popular, mainly among business travellers. Uber, in particular, the well-known ride sharing company, had to face the rules of each Country, given that there is not a shared legislation at a European level. The same happened to their “colleagues” of short-rentals companies, such as Airbnb and Homeaway.

The last vicissitudes saw once again Uber in the middle of many debates on its legality, and on the possible complications regarding security and insurance formalities. For example, in Denmark, Uber was officially declared illegal, since it has been considered a for-profit company and not a real transport service, and the tribunal of the City of Copenhagen fined six drivers of the popular platform for about 800 euros. Furthermore, in France, Uber signed a partnership agreement with the insurance company Axa, in order to guarantee more safety both to drivers and passengers. Axa also signed a deal with BlaBlaCar, while Allianz started a collaboration with Car2Go. In Russia, Uber decided to merge with Yandex, the popular search engine which also works in the transportation market. The new company will worth 3,73bn dollars and its activity will include 127 cities in 6 Countries (Russia, Azerbaijan, Armenia, Belarus, Georgia and Kazakistan). In Czech Republic, as reported by East Journal, a regional court prevented the company from operating in the city of Brno. In Italy, taxi drivers protested after the tribunal of Rome suspended the ordinance that had interrupted the use of the app on the whole national territory.

At a European level, the European Court of Justice will decide about the future of the ride sharing companies by the end of the year. However, a judge recently declared that these companies, in particular Uber, shall not be considered as digital platforms but transport companies. Member States can ban or fine them without preventively notify the draft law to the European Commission. 

It is interesting to analyse the investment round that the startup Grab received, a Uber competitor operating in the south-east Asia that received funds for 2.5bn dollars from the Japanese bank Softbank and Chinese Chuxing, leader in the transport sector in 400 cities in China.

At Twissen we observed that the recent legislative evolutions in the sharing economy transport sector haven’t completely clarified the operativity in the European market. Notwithstanding, these companies are still very popular, in particular among specific targets of tourists, such as business and bleisure travellers.

Francesco Redi

President and founder at Twissen. Manager in Local Development, Tourism Policies,  EU Funds. He cooperates with several European universities, public bodies, development agencies, DMOs and enterprises.