Technology has had a transformative impact on various aspects of our lives. The way we rely on technology today, for communicating with people, shopping, hailing taxis, making airline and hotel bookings, watching movies or even learning new subjects, was unfathomable even a decade back. Technology has evolved so rapidly that regulatory mechanisms across countries in several sectors are simply playing catch-up. This is true for both developed and developing countries.
Let us take the example of Uber, Lyft, Ola and other ride-hailing services, which exist in many countries. Are these transport/taxi services or are these digital application-based services? It was only as recently as December 2017 that the European Court of Justice (ECJ) ruled against Uber's argument that it was a computer service business providing a technology platform that connected passengers with independent drivers. Instead, the ECJ ruled that Uber was a transportation company, subject to the same rules as taxi services instead of the lighter regulatory framework governing the digital space.
Several states in India have enacted specific rules that mandate that online taxi aggregators need to obtain licences. In several states of the USA, laws governing ride-sharing businesses are different from traditional regulations governing taxis. However, recently, legal interpretation has evolved to provide employment benefits to Uber drivers (in a New York Department of Labor ruling), rejecting Uber's argument that its drivers are 'independent contractors' and not full-time employees. In August 2018, New York City Council passed legislation authorising limits on the number of licences for ride-hailing taxi services, with a view to regulating the number of vehicles operating on such apps.
These experiences reveal that the promise of technology also presents challenges to the nature and extent of regulatory controls over such technologies and their operators. Governments cannot anticipate with certainty the evolution and impact of technology; the evolution of the law has therefore occurred as a response to the social and economic impacts of new technology.
What does all of this mean for negotiating commitments on trade in services under the World Trade Organization (WTO) and other trade agreements? Th following issue of Trade Hot Topics seeks to discuss some of the main issues that countries need to consider while negotiating trade in services, and interpreting commitments on trade in services, in view of rapid technological evolution.
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