Advocate General opines that an electronic application service that puts taxi passengers directly in touch with taxi drivers constitutes an Information Society Service

HomeInsightsAdvocate General opines that an electronic application service that puts taxi passengers directly in touch with taxi drivers constitutes an Information Society Service

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The Romanian company SC Star Taxi App SRL operates a smartphone which places users of taxi services directly in touch with taxi drivers. The app allows the user to run a search which displays a list of taxi drivers available. The customer is then free to choose a particular driver from the list. The company does not forward bookings to taxi drivers and does not set the fare, which is paid directly to the driver at the end of the journey.

In December 2017, the Bucharest Municipal Council adopted a Decision which extended the scope of the obligation to apply for authorisation in relation to “dispatching” in order to cover operators of apps, such as Star Taxi App. Star Taxi App was fined for infringing the new rules. Star Taxi App issued proceedings against the Council in the Romanian courts seeking annulment of the Council’s 2017 Decision on the basis that its business constituted an Information Society Service to which the exemption from prior authorisation under article 9(1) of the E-Commerce Directive applied.

The Romanian court has asked the CJEU whether a service that puts taxi passengers directly in touch with taxi drivers via an electronic app constitutes an “Information Society Service” (ISS). If yes, it has asked the Court to assess the validity of the Romanian Council’s 2017 Decision in the light of the E-Commerce Directive.

Advocate General Szpunar said that the Star Taxi App service falls within the definition of an ISS under the Directive because it is provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services. However, the AG said that following Case C-434/15 Asociación Profesional Elite Taxi, a service does not necessarily fall under the definition of an ISS even if it displays the characteristics of the definition. That is particularly the case where the service is inherently linked to the provision of another service, which is the primary service and is not provided by electronic means, such as a transport service. That inherent link is characterised by the fact that the provider of the electronic service controls the essential aspects of the other service, including the selection of the providers of that other service.

The AG noted that Star Taxi App does not need to recruit taxi drivers and does not exercise control or decisive influence over the conditions under which the transport services are provided by the taxi drivers. Unlike other similar services, such as Uber, the service provided by Star Taxi App is an add-on to a pre-existing and organised taxi transport service. Star Taxi App’s role is therefore confined to that of an external provider of an ancillary service, which is important but not essential for the efficiency of the primary service, i.e. the transport service.

As for the Romanian Council’s 2017 Decision, the AG observed that the E-Commerce Directive prohibits Member States from making the provision of an ISS subject to prior authorisation. However, that prohibition does not affect authorisation schemes that are not specifically and exclusively targeted at an ISS, as in this case.

However, that finding was subject to the condition that the non-electronic services covered by the existing authorisation scheme and the ISS to which the scheme is extended are equivalent in economic terms.

The AG noted that Articles 9 and 10 of the Services Directive (2006/123/EC) allow Member States, under certain conditions, to make access to a service subject to such a scheme. It was for the Romanian courts to decide whether the conditions had been met.

The AG concluded that:

  1. a service consisting in putting taxi passengers directly in touch with taxi drivers via an electronic app constitutes an ISS only where that service is not inherently linked to the taxi transport service such that it does not form an integral part of the taxi transport service;
  2. the E-Commerce Directive does not prevent a Member State from setting up an authorisation scheme for ISS providers if the service is economically equivalent to the non-electronic service; and
  • the Services Directive precludes the application of an authorisation scheme unless it complies with certain criteria, which is a matter for the national court to determine.

(Case C-62/19 Star Taxi App SRL v Unitatea Administrativ Teritorială Municipiul Bucureşti prin Primar General EU:C:2020:692 (Opinion of Advocate General) (10 September 2020) — to read the Opinion in full, click here).