Some legal and practical thoughts about Uber's ban in Portugal

Uber was banned from operating in Portugal yesterday after an injunction was granted by a national court in addition to a €10,000 daily fine for contempt of court. This injunction was requested by the National Taxi Driver Association (ANTRAL) and although the details are sketchy as the sentence was not published, here are my thoughts:

1. These are interim measures, not the final decision

The Portuguese Civil Procedure Code establishes the possibility of any party requesting an injunction to protect their rights before a final decision on a case is produced. These are interim measures set via a parallel and quick procedure, decided separately from the main action or case. The logic here is to protect interests or rights from further damage. Assuming my knowledge of Portuguese procedural law is not woefully outdated, an injunction can be granted if all of the following requirements are met:

i) likelihood of an underlying right (fumus bonis juris);

ii) likelihood of damage to underlying right if action is not stopped (periculum in mora);

iii) adequacy of proposed interim measures to protect the underlying right;

For an injunction to be granted, the judge looks for those three requirements and has to be reasonably convinced all are met. However, it does not need to be 100% certain that the underlying exists, only that it is likely to exist.  In other words, the judge held that he/she thinks ANTRAL (the claimant) probably has an underlying right, that Uber's continued operation in Portugal would damage such right and that the interim measures (blanket ban, disconnecting website) are adequate to protect the alleged right.

In addition, under certain circumstances (whose details evade me now other than their connection with a risk to the effectiveness of the interim measure proposed) it is legally possible to get an injunction decreed even without hearing the counterparty. I suspect that this happened with Uber. When the counterparty is not heard, they are entitled to be heard afterwards and present their case arguing why the interim measures should be struck down.

Crucially, the injunction decision has no impact on the main case, ie it does not establish any kind of precedent or limitation on the judge's ability to decide the final decision differently. If my memory serves me well  I think that is either mandatory for another judge to decide the main case or at least it is quite common for different judges to do the injunction and main procedures.

2. What can Uber do

If they have not been heard yet within the injunction process, present their case. Otherwise, they can appeal the decision. Remember, this is a separate process from the main action. The main action will follow its normal (glacial) course in the Portuguese court system.

3. What can Uber drivers do

I am not sure but I assume they were not parties neither to the main action nor the injunction but only Uber is, so technically they could continue operating assuming they had the infrastructure to do so. Having said that, I would love to see the service agreements they signed with Uber (assuming such document exists).

My knowledge of the Procedural Civil Code does not extend to the rules regarding third parties joining actions on either side. If Uber ultimately prevails (something I find unlikely) they could sue ANTRAL for damages though.

4. Some thoughts about Uber's expansion strategy

Uber's expansion strategy into new markets has always been to "fire first and ask questions later." They take their products and launch them in said new markets without worrying about the legality of their service(s) following what the French would call a "fait accompli" approach to expansion.

The upside is that they win either way. If the laws do not protect local incumbents (as they tend to do in many markets, for example here in the EU) then their services become quite popular quite quickly. If, however, local laws protect incumbents one of two things happen: one, said incumbents do not fight back in an organised fashion or do so in haphazard ways (ie, like the taxi protests in London) and pay a reputation price; two, they use the court system to defend their vested interests, and even if successful (as in Portugal and Spain), they also pay a reputation price. Plus, because people have used the service and genuinely find it superior will complain loudly and become a free lobby group for the company. The end game is probably to use that wave of support to drive legal reforms through.

On a related note, Airbnb has followed more or less the same strategy but has been able (for the most part) to avoid a string of legal challenges, although the day of reckoning may come  due to tax issues. Perhaps the hotel industry does not perceive it as a competitor and as such is less inclined to make a united front?

5. What is my take on all this

Personally, I am in favour of de-regulation of most professions/occupations and see no reason why passenger transport should be so heavily regulated or subject to preferential treatment. This view extends to other areas such as pharmacies or (gasp) lawyers. Having said that, while the laws protecting said interests exist, they are to be complied with.

Moreover, if regulation is to come down the pipeline it must ensure that the playing field is level as I can totally see Uber creating a dominant position in the market and well, let's not mince words: abuse it. That is the real endgame here.

How would we go about it then? I am not sure, but here are two ideas to get the ball rolling:

1. To force interoperability and restrict driver exclusivity; or,

2. The opposite, to consider drivers as company employees, thus restricting any company operating in this market the ability to outsource many costs (fleet, national insurance, insurance, etc).

PS: Oh, by the way, I have nothing against surge pricing. Au contraire.