Taxis do not ease legal pressure on Uber

One legal case chases the other at Uber France. But all these procedures illustrate that many taxis believe they are still at war with the undisputed leader in VTC in the world and in France.

At the beginning of October, Uber was criticized for its UberPop service. The Paris Court of Appeal ruled that this formula, where the platform connected passengers and drivers with a vehicle but without qualifications, constituted unfair competition with taxis. As a result, Uber was ordered to compensate 149 taxi drivers to the tune of 850,000 euros overall. Amounts ranging from 1,400 to 16,000 euros depending on the case. “This case concerns the UberPop service, which was suspended in 2015,” the platform was happy to point out. Furthermore, the money did not pose a major threat to a company that had second-quarter revenue of $9.2 billion.

The hearing which will take place this Friday at the Paris commercial court is of a completely different significance for the group listed on Wall Street. Taxis are still attacking Uber for unfair competition. But this time, the figures are dizzying: 2,480 taxis or taxi companies are demanding damages of 456 million euros in total. They estimate that with various subterfuges, the platform has deprived the State of nearly 3.8 billion euros in tax revenue since its installation in France. “We do the same job as Uber, transporting people. But under unfair conditions,” said one of the complainants, Jean Barreira, president of the Association of New Parisian Taxis.

“The amount of compensation requested depends on the amount of fraud,” estimates Cédric Dubucq, taxi lawyer. According to him, Uber should apply to the letter the case law of the Court of Cassation, which, in 2020, ruled that an Uber driver must be reclassified as an employee. He also points out tax optimization practices which would allow the platform to pay very little tax in France.

Faced with these accusations, American society is defending itself step by step. “We are being told about unfair competition but the sector is doing well,” says Uber France. G7 saw its activity increase by 19% in 2022 compared to 2019. As for taxes, we pay the Gafa tax of 3%.” But it is on the status of drivers that Uber France is most offensive. Knowing that in France, it is up to the independent driver to take the matter to court if he wishes to be reclassified as an employee, with the courts then interpreting the case law. “No law requires us to pay our drivers. Moreover, less than 1% of them make a request to the courts. And, in 60% of cases, they do not win their case,” insists a spokesperson for Uber France.

However, in January 2023, the king of VTC was ordered by the Lyon industrial tribunal to pay some 17 million euros to 139 drivers. However, for Uber, using driver or delivery service providers is part of its already very strained economic model - since its creation, the company has never been profitable. It recently improved its performance, posting net income of $394 million in the second quarter. But massively salaried its drivers or delivery people with the related social charges would weigh down its accounts too much.

The pressure in this direction is increasingly strong on Uber. In the United Kingdom, in 2021 it granted salaried worker status to its drivers, with minimum wage and paid leave. In Spain, meal delivery workers are now employees. And another threat looms for the platform: a well-advanced draft European directive provides, under certain conditions, the presumption of employment for drivers. If adopted, Uber boss Dara Khosrowshahi has already warned: “We would have to significantly reduce the number of drivers and/or couriers on the road.”