European Union: ECJ Dismisses Request For Preliminary Ruling In Proceedings Against Uber

Last Updated: 16 January 2017
Article by Koen T’Syen

On 27 October 2016, the Court of Justice of the European Union (the "ECJ") declared inadmissible the question which the President of the Dutch-speaking Brussels Commercial Court (the "President") had referred for a preliminary ruling on 23 September 2015 in the context of cease-and-desist proceedings against Uber Belgium BVBA and three Dutch Uber entities (together "Uber") regarding the UberPOP ride-sharing service.  The ECJ held that the question referred was not sufficiently clear and accurate (ECJ, 27 October 2016, Case C-526/15, Uber Belgium BVBA).

The President's question related to the compatibility with EU law of the Ordinance of the Brussels Capital Region of 27 April 1995 on taxi services and vehicle location services with driver (Ordonnantie van het Brussels Hoofdstedelijk Gewest van 27 april 1995 betreffende de taxidiensten en de diensten voor het verhuren van voertuigen met chauffeur/Ordonnance de la Région de Bruxelles-Capitale du 27 avril 1995 relative aux services de taxi et aux services de location de voiture avec chauffeur – the "Ordinance").

Pursuant to Article 2, 1° of the Ordinance, the existence of a "taxi service" and, hence, the applicability of the Ordinance's licence requirement, is subject to three cumulative conditions: (i) the service should consist of the paid transport of people by a carrier with a vehicle (which should satisfy specific conditions); (ii) the vehicle should be made available to the public either at a specific parking space on the public road or at any place which is not open to public traffic; and (iii) the destination should be determined by the client.

After having found that these three conditions are satisfied and, hence, the Ordinance breached to the extent that the remuneration of UberPop drivers exceeds the actual costs which they incur, the President examined whether the situation would be the same if the remuneration of UberPop drivers only covers their costs. This question brings up the concept of ride-sharing, where private individuals, taking the same route, can share the costs. The President therefore decided to refer the following question for a preliminary ruling to the ECJ:

"Should the principle of proportionality, laid down in Article 5 [of the Treaty on the European Union] and Article 52(1) of the Charter [of Fundamental Rights of the European Union – the "Charter"], read in conjunction with Articles 15 through 17 of the Charter and with Articles 49 and 56 [of the Treaty on the Functioning of the European Union – "TFEU"], be interpreted as precluding a rule such as that laid down in the [Ordinance], interpreted in such a way that the term 'taxi services' also applies to unpaid individual carriers who are involved in ride sharing (shared transport) by accepting ride requests which they are offered by means of a software application of the companies Uber BV et al established in another Member State?"

Articles 15, 16 and 17 of the Charter guarantee the freedom to engage in work, freedom to conduct a business and the right to property respectively. Articles 49 and 56 TFEU protect the right of establishment and the freedom to provide services.

In assessing the question referred, the ECJ first reiterated that (i) the preliminary ruling mechanism is not designed to provide a consultative opinion on general or hypothetical questions, but to interpret elements of EU law which are necessary for the resolution of a dispute; and (ii) the referring court should define the legal and factual background accurately and provide a justification for the choice of the EU law provisions to be interpreted.

Applying these principles to the case at hand, the ECJ held that the request for a preliminary ruling was inadmissible. It noted that the question referred is hypothetical as it concerns the situation where the service is provided free of charge, whereas, pursuant to Article 2, 1° of the Ordinance, the Ordinance's licence requirement only applies to services being provided for remuneration. 

Further, the ECJ criticised the President's "contradictory" description of the ride sharing activity. It pointed out that the term "ride sharing" is generally construed as the use of the same car by several persons taking the same route in order to reduce traffic and share costs. The President, in contrast, defined "ride sharing" as rides performed by a driver where the destination is determined by the passenger only. In the absence of additional information regarding the nature and the terms of the service, the ECJ considered that it was unable to determine the activity with sufficient accuracy.

In view of these findings, the ECJ concluded that the question referred was not sufficiently clear and accurate.

Should the President so wish, he is free to refer a revised request for a preliminary ruling to the ECJ.

For a full discussion of the President's judgment of 23 September 2015, we refer to the October 2015 issue of VBB on Belgian Business Law, Volume 2015, No. 10, p. 18, available at www.vbb.com.

Incidentally, on 25 November 2016, the Official Journal of the EU published an updated version of the EU's "Recommendations to national courts and tribunals, in relation to the initiation of preliminary ruling proceedings". The updated text aims to (i) remind national courts and tribunals of the essential characteristics of the preliminary ruling procedure; and (ii) provide them with all the practical information required in order for the ECJ to be in a position to give a useful reply to the questions referred for a preliminary ruling.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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