The Court of Justice of the European Union has ruled that Uber is a transport service, not merely a tech platform, citing the "indispensable" link the company creates between drivers and passengers.
Siding with taxi drivers in Spain, the court said Uber should be regulated in the EU.
A taxi drivers association in Barcelona had complained that Uber was guilty of unfair competition and misleading business practices, seeking to overturn the status quo that has allowed Uber to avoid licensing and regulation under transportation service laws. Wednesday's ruling resolves much of that years-old case.
With the ruling by Europe's highest court, Uber can now be regulated as a transport service at the national level within the EU's member states.
While acknowledging Uber's status as an intermediary service between drivers and riders, the court ruled that because Uber's purpose "is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, [Uber] must be regarded as being inherently linked to a transport service and, accordingly, must be classified as 'a service in the field of transport' within the meaning of EU law."
Uber has maintained that in Europe and beyond, it merely provides an e-commerce platform that facilitates rides.
But on Wednesday, the European court ruled: "The Court notes in that regard that the application provided by Uber is indispensable for both the drivers and the persons who wish to make an urban journey. It also points out that Uber exercises decisive influence over the conditions under which the drivers provide their service."
The ruling comes one month after tax drivers in Spain held the latest in a series of strikes and large protests against Uber and Cabify, a rival service.
Based in San Francisco, Uber has grown rapidly since its founding in 2009 to operate in 77 countries and more than 600 cities around the world. It has major offices in both London and Amsterdam.