European Union Investigates Spanish Regulations on Ride-Hailing Services

Spain taxis

The European Union (EU) is looking into the tightening of regulations experienced by ride-hailing apps in Spain.

The EU has opened a preliminary probe into whether the latest measures enacted by the Spanish government protecting the taxi industry from private hire services such as UberBolt and Cabify, are a breach of EU law, the Financial Times (FT) reported Friday (July 28).

Ride-hailing services have been struggling to unlock the Spanish market for years, as city authorities in the area have limited the number of licenses available, according to the report. Now, after the European Court of Justice (ECJ) ruled against Barcelona’s restrictions on ride-hailing services on June 8, Spain has enacted new measures protecting the taxi sector even further.

Feneval, an industry group representing the ride-hailing companies, wrote to the EU transport commissioner expressing their concern that this decree was in breach of the ECJ ruling.

The EU responded to Feneval by saying the inquiry was growing in order to “better understand Spain’s reasoning” regarding a number of rules concerning taxis and private hire vehicles in the country, the FT reported.

The discussion in Spain regarding regulation of the ride-hailing sector is highly influenced by taxi unions who perceive the gig economy business model as a threat to their business.

Across the country, a pattern has emerged as the rules for a VTC license — the permit that covers non-taxi private hire drivers in Spain — versus authorized taxi drivers diverge. For example, many Spanish governments have adopted rules that mandate a minimum time gap between the time of booking and the time of pick-up for VTC reservations. That rule is favored by taxi unions.

In some parts of Europe, a growing share of taxi drivers’ business is coming from Uber. The share of European taxi drivers’ rides that are booked on the platform has risen from 5% a year ago to 10% today, Reuters reported May 29.

Taxi drivers in the region are adopting the app and using the scheduled rides it provides to add to their existing curbside pickup business, according to the report. With more drivers, Uber is delivering better service levels and growing its business in the region, per the report.