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Spain: Regulator warns of losses due to restrictions in cars-for-hire

By  |  June 14, 2016

Spain’s National Commission for Markets and Competition (CNMC) has released a report on the economic impact of current restrictions to open competition affecting the Vehicle for Hire (VTC) market, which includes cab-hailing services such as Cabify. The result finds these restrictions hamper the development of competition in the urban passenger transport sector, consolidating the existing monopoly held by taxi companies. None of these restrictions are justified by competition or any other criteria of economic efficiency, the report concludes.

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    For these reasons, the CNMC has requested that these restrictions be removed from the law books. Previous requests by the CNMC, sent to the Council of Ministers in early 2016, were not acknowledged. In response, the CNMC filed a civil suit against the government, hoping to force a change to the laws and avoid unjustified barriers to the market.

    The calculations presented in the report have estimated annual losses to consumers as a result of these restrictions (due to higher prices and other costs) at a minimum of 324.3 million euros annually. Therefore, the CNMC concludes, the only option that obeys the public and economic interest is to establish a regime with free access and open pricing, open to all competitors who wish to jump into the passenger transport market.

    Full Content: CNMC

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