Mobile phones are giving consumers a growing number of ways to communicate, share information, and participate in commerce. When new technology is introduced into the market, it usually outpaces the ability of law and regulation to keep up. Ride-sharing service Uber’s clash with Brazilian law offers the latest such example.
Uber has been operating in Brazil since May 2014, offering its services in São Paulo, Rio de Janeiro, Brasilia, and Belo Horizonte. Like other car-sharing apps, Uber enables users to summon a car via an application downloaded to their smartphones. Uber contends it is a technology company and not a transportation company. It also contends that its drivers are contractors, not employees. The drivers are neither licensed nor regulated by any government agency; they also do not pay any license fees.
In late April, the State Court of São Paulo ordered Uber to stop offering its services in Brazil, an order that followed a request from a taxi drivers union. The taxi union argued that Uber’s service of providing rides on demand infringes on the exclusive right of licensed taxi drivers to provide such transportation services. The taxi drivers argue that Uber drivers should also be licensed and regulated. Similar arguments for regulation have been made in Portugal, as well as several other countries in Europe. In the United States, some states are pursuing legal restrictions that would require Uber drivers to carry licenses and insurance, among other requirements.
Despite the legal order, Uber service in Brazil remained interrupted as Uber refused to comply with the judge’s order. The following week, a different judge struck down the injunction against Uber, according to Reuters. That judge said that the injunction was beyond the scope of the court.
Brazilian law is still adjusting to the ways that Internet technologies are affecting commerce. Businesses and legal observers are just now getting an understanding of the new rules and guidelines for the Internet established by the Marco Civil law. Uber contends that its service provides choice in transportation and employment opportunities. Taxi drivers claim that Uber is unfairly taking those opportunities away.
The contradicting court orders in the case show that there is no legal consensus on how Brazilian law applies to Uber. Until courts, and possibly even lawmakers, can more clearly define how the law applies to Uber and other such companies, these legal disputes are likely to continue.
