VAT is kinda a sales tax in Europe. It means sellers must charge 20% on top of any sale, and give it to the government. Very small companies are exempt.
Uber was arguing that they were just a platform like EBay, and that every individual driver was a small enough business that they didn't have to pay the tax. Uber paid the tax, but only on Ubers fee, not the total journey amount.
This ruling is the government deciding that the tax was due on the entire journey.
Is personal labor service really subject to VAT? That's horrifically regressive, crippling the lowest paid laborers with VAT on top of income tax, instead of taxing the profit captured by the enterprise.
Personal labour in the sense of employment is exempt from VAT tax if the person is employed but then other forms of taxes, like the income tax apply.
The amount of tax as well as the form in which they are collected vary from country to country.
My personal opinion is that the tax system is actually quite clear and progressive, at least for me as a freelancer. I can file my taxes online without any hitches and the amount to pay and deductibles are easy to get (at least in Germany and Spain).
Then again this whole thing varies from country to country and Spain requires you to give quarterly justifications on the VAT tax you owe which amounts to a lot of paperwork but not too much in my mind.