Star Taxi App Case: Shaping EU Ride-Hailing Regulation

With the increasing role of digital platforms in facilitating transportation services, legal questions arised regarding their classification and the extent of regulatory oversight they should face. The core issue is whether these platforms should be treated merely as intermediaries under Directive 2015/1535 or if their role extends into transport service provision, subjecting them to stricter national regulations. The European Court of Justice (CJEU) has addressed this matter in various cases, including the Star Taxi App case, which offers further clarity on the legal distinctions applicable to ride-hailing and taxi aggregation platforms.

Understanding the regulatory landscape

Under EU law, the classification of digital services plays a crucial role in determining their regulatory obligations. Directive 2015/1535 defines an “information society service” as one that is:

1. Provided for remuneration,
2. Conducted remotely,
3. Delivered via electronic means,
4. Initiated at the request of a recipient.

In principle, services that meet these criteria enjoy certain legal protections, limiting the ability of EU Member States to impose restrictive measures such as licensing or operational controls unless specific procedures are followed, including notifying the European Commission.

However, transport services are explicitly excluded from this directive and instead fall under national regulatory frameworks, which include requirements for licensing, operational oversight, and price control. The classification of digital platforms operating in the mobility sector depends on their level of involvement in the core service delivery process, which determines whether they function purely as intermediaries or as transport providers.

The Star Taxi case: legal examination

In November 2020, the Court of Justice of the European Union (CJEU) ruled on SC Star Taxi App SRL v. Bucharest Municipality (Case C-62/19). The case concerned whether Star Taxi, a digital platform connecting passengers with licensed taxi drivers, should be classified as an information society service or a transport service provider.

The CJEU ruled that Star Taxi operates as an information society service rather than a transportation provider. The decision was based on the following key factors:

1. Star Taxi exclusively connects passengers with licensed taxi drivers, who are already regulated under national transport laws. Their suppliers are existing in the market and already been regulated.
2. The platform does not impose pricing policies or determine fare rates; these are regulated by the national licensing authorities.
3. It does not provide additional transport-related services such as vehicle fleet management or driver employment.
4. The company does not control the drivers’ schedules, working conditions, or behavior beyond facilitating digital connections.
5. The service offered by Star Taxi is distinct from ride-hailing platforms like Uber, where the platform exerts significant control over fares, driver operations, and customer interactions.

Star Taxi does not interfere with the actual provision of transport services beyond enabling digital communication, the CJEU ruled that it falls under the classification of an information society service. As a result, restrictive licensing requirements imposed by the Bucharest Municipality were deemed incompatible with EU law.

Implications for digital platforms

The Star Taxi ruling further refines the legal understanding of digital transportation platforms, distinguishing between those that merely act as intermediaries and those that exert substantial control over transport services. Unlike Uber, which was classified as a transport service provider due to its pricing policies, driver control, and direct management of ride conditions, Star Taxi was recognized as an intermediary. This distinction is crucial for platform operators navigating regulatory frameworks in different jurisdictions.

Key factors that influence platform classification include:

1. Whether the platform hires non-licensed drivers who rely on it exclusively for providing services.
2. Whether the platform sets conditions for service provision, such as fare pricing, working hours, or contractual obligations.
3. Whether the platform exercises control over drivers’ access to the service.

As digital mobility solutions continue to evolve, regulators and platform operators must carefully consider these distinctions to ensure compliance with both EU and national regulations while fostering innovation in the sector.