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HomeTechEU court overturns Barcelona's limits on ride-hailing groups

EU court overturns Barcelona’s limits on ride-hailing groups


An EU high court has struck down Barcelona’s restrictions on driver’s licenses in a ruling that marks a victory for app-based taxi groups like Uber and Cabify.

The city council of Barcelona – one of the most hostile to ride-hailing in Europe – ruled in 2018 that for every 30 traditional taxi licenses only one license could be issued for a vehicle affiliated with the likes of Spain’s Cabify or Uber from the US.

But the European Court of Justice said on Thursday that the licensing relationship “contrary to European law”. It noted that a total of 15 private car hire companies claimed the regulation had “the sole purpose of protecting the interests of the taxi industry”.

The ECJ ruling could have far-reaching implications across Europe, as it states that ensuring the “economic viability” of taxi services “cannot constitute an overriding public interest reason” for covering private rental fleets. Italy and Greece have justified similar measures against apps like Uber to protect traditional taxi companies.

A Cabify affiliate brought the lawsuit against Barcelona, ​​led by left-wing mayor Ada Colau, who received international praise for her effort to reduce car use but was criticized at home for allegedly poor management and corporate reticence.

Colau was defeated in the mayoral election at the end of May. Her pro-business rival Xavier Trias secured the largest representation on the city council, but as no candidate secured an absolute majority, talks of forming a government continued.

The ECJ said that Barcelona had “imposed restrictions on the exercise of the freedom of establishment” by requiring Barcelona-specific licenses in addition to the national licenses, then adding the license ratio skewed in favor of traditional taxis.

The court rejected the claim that the measures would protect the environment or contribute to “good management of transport, traffic and public space”.

Around the world, Uber and its rivals have long been seen as an existential threat to traditional taxi drivers, who often have to pay large sums to buy their licenses. In recent years, Uber has been forced to embrace traditional taxis and bring them into its app to gain a foothold in European markets such as Barcelona, ​​which have introduced restrictions on private rental cars.

In Spain, about 4,000 taxis can now be rented via the Uber app. Company said earlier this week that taxis now account for about 10 percent of all its customers’ journeys in Europe, the Middle East and Africa, twice as many as a year ago.

Two Spanish trade groups for ride-hailing companies, Feneval and Unauto VTC, welcomed the Court of Justice’s decision, saying it “challenged many restrictions” on members introduced in recent years by regional governments in Catalonia, Valencia, Aragon and the Balearic Islands.

In Catalonia, the regional government, which is based in Barcelona, ​​has imposed rules requiring passengers to wait at least 15 minutes between ordering a car and its arrival. They also stipulate a minimum vehicle size larger than that of a typical ride-hailing vehicle.

When asked about the Court of Justice ruling, Janet Sanz, one of Barcelona’s deputy mayors, declined to comment on the court’s rejection of the city’s permit requirements. Cabify declined to comment.

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