Activities of Uber vs unfair competition

Since the appearance of the mobile application UberPop (Uber has been present in the Polish market since August 2014) allowing to establish contact between persons who need transportation within the limits of a given city and persons who offer transport with their own car heated discussion have been taking place as to conformity of this type of activity with the provisions of the law.

Uber’s entry into the market which until recently was reserved for licensed taxi drivers has triggered a wave of protests in the countries of Western Europe. In some of them, activities of Uber have been banned, like in France or in Germany.

At first, in Germany the prohibitions on Uber’s activities were placed by municipal authorities of Hamburg, Berlin or Munich. And the ban on passenger transport without a suitable permit introduced in August 2014 by the Regional Court in Frankfurt (file ref No. 2-03 O 329/14) in the proceedings to secure claims instituted at the request of the taxi drivers association was nationwide in scale. In September 2014, the same court directly forbade to accept and execute orders through the UberPop application (file ref No. 2-06 O 318/14).

Then the taxi drivers’ attempt to block Uber’s entry into the market of Barcelona, Spain, made the Spanish court refer a question for preliminary ruling to the EU Court of Justice. In the case C-434/15 Elite Taxi ./. Uber Spain, the EUCJ will have to answer the question what actually is the nature of services provided by Uber company, because earlier settlement of the issue will allow to judge whether the Member States may impose their own limitations on Uber’s activities in their territories. Uber maintains that it does not provide transport services which are not covered by the directive on the provision of services in the internal market. Should the EUCJ find that Uber acts only as an intermediary between drivers and passengers or provides services related to the information society, the bans on activities in force in many European countries could be regarded as constituting a violation of the freedom to provide services in the EU. Both Uber and taxi drivers eagerly wait for a decision.

Meanwhile in Poland, taxi drivers more and more often protest against Uber’s activities which can be recognized as unfair competition.

It should not escape attention that taxi drivers must have a licence to provide domestic road transport of passengers by taxi. Getting such licence is preceded by completion of training in road transportation by taxi and passing a relevant exam. In addition, taxi drivers must produce a current medical certificate issued after driving aptitude tests have been taken, prove their title to a vehicle and properly mark their vehicles.

The above requirements do not apply to the drivers of Uber which puts them in a privileged position in relation to other entities acting in accordance with the law in force. What is more, drivers of Uber do not have to have fiscal cash registers and often their activities remain in the so called “grey zone”. Tax issues have caught interest of the Ministry of Finance who has made an announcement confirming that income of natural persons obtained from the provision of transport services using this application are subject to personal income tax in line with the principles provided for in the act of 26th July 1991 on personal income tax.

Since 19th February 2016, Uber has changed the principles of cooperation with drivers requiring them to quote TIN [Tax Identification Number], the European tax identification number [so called VAT EU], description of activity and address at which it is registered and to confirm that documents have been filed with the Central Registration and Information on Business (CEiDG). It does not change the fact that they still operate on preferential terms as compared to traditional taxis.

It should be noted that in case of Uber the assessment whether acts of unfair competition are committed should not be made only in relation to the very company offering a mobile app but in relation to individual drivers using the application. Because they are entrepreneurs within the meaning of the act of 16th April 1993 on combating unfair competition since even operating for money or professionally as a sideline they take part in business activity. Offering passenger transport without a licence and failing to meet other conditions set out by the law can be recognized as an act of unfair competition, i.e. an act contrary to the law or good practices which threatens or acts against the interest of another entrepreneur or customer.