Spanish ‘anti-Uber’ taxi strike ends after government agrees new regulation

A national six-day taxi driver strike in Spain has ended after the government agreed to pass regulation that will allow the country’s autonomous communities to cap the number of private hire vehicle permits within their cities. The VTC licenses are used by Uber and local ride-hailing rival Cabify to offer professional driver services in the country. […]

A national six-day taxi driver strike in Spain has ended after the government agreed to pass regulation that will allow the country’s autonomous communities to cap the number of private hire vehicle permits within their cities.

The VTC licenses are used by Uber and local ride-hailing rival Cabify to offer professional driver services in the country. So the government’s decision looks likely to limit the size of their businesses in regional markets which choose to uphold the cap.

Previous decisions by European courts have essentially closed down Uber’s p2p (non-professional driver) ride-hailing services in the region. So lobbying cities to deregulate and reform taxi laws in its favor is Uber’s game now.

But it’s a long game, and one that may not work in every market — underlining the drivers behind the company repositioning itself as a multimodal transport platform, after buying its way into e-bikes.

Spain’s Development Ministry issued the news the taxi industry had been pressing for yesterday, in a press release, following a meeting of the National Transport Conference that had been forward as a result of the strikes. It said measures to enable the country’s regional governments to regulate the VTC sector locally, allowing them to put in place their own urban mobility policies, will be implemented in September.

Taxi associations have parked their strike as a result — albeit, making it loud and clear on Twitter that they’ll be returning to keep up the pressure on legislators come September.

It was an attempt by the mayor of Barcelona to pass a law to locally enforce the 1:30 ratio — subsequently blocked by the courts — that triggered the latest strike.

A strike that — as Uber hyperbolically tells it — “paralyzed Spain”.

Of course the reality was rather closer to an inconvenience, and mostly for tourists, given the country has multiple, typically low cost urban public transport options. And locals love to scoot.

Spain’s taxi associations have been holding fierce strike protests for several years, ever since Uber re-entered the market with a licensed service offering — after some of same associations had successfully challenged its p2p service in the Barcelona courts and got UberPop banned.

Taxi drivers denounce Uber and another local ride-hailing player, Cabify, as exploitative and corrupt, and have been applying pressurize on local and national governments to protect their industry.

A judgement from the CJEU at the end of last year, deeming Uber a transport company — and therefore firmly subject to local transport laws — looked like the final nail in the coffin for ride-hailing platforms to circumvent taxi regulations in Europe.

Making lobbying for deregulation and (in the case of Uber) pushing into multi-modal transport options the regional long play for ride-hailing startups. Uber’s e-bikes are heading to Europe this summer.

In Spain the taxi industry’s anger has been focused on failure to uphold a 2015 reversion of a transport law which reinstated an earlier VTC license cap, dating back to 1990, that sets a ration of one VTC per 30 taxis.

However the provision has not been actively enforced, and has seemingly been easy (though not necessarily cheap) for ride-hailing firms to circumvent in practice — with the firms buying up VTC licenses from local operators and recruiting drivers via social media ads and job ad platforms like Jobandtalent.

Reuters reports there are currently 9,000 VTC permits granted to the online services vs 70,000 taxi permits. If the 1:30 ratio were to be upheld it would mean at least 6,600+ fewer permits — so likely thousands of Uber and Cabify contractors being put out of work.

 

VTC association, Unauto VTC, has sought to block attempts to enforce the cap — such as by challenging the Barcelona city authority’s attempt to enforce the ratio last month.

And ride-hailing companies appear to be seeking legal avenues to block the government’s latest move to devolve regulatory powers (for instance an Uber spokesperson pointed us to this report, in Mercado Financiero, which quotes a law professor questioning the constitutional validity of the government’s use of a decree to transfer the competency).

At the same time they are making public noises about wanting to work with the taxi industry.

In a blog post responding to yesterday’s government announcement that VTC regulatory powers would be devolved, Uber holds out an olive branch to taxis, calling for all players in the urban mobility space, private and public, to work together — and arguing that if people are going to leave their cars at home “we must offer them more and more alternatives, not less”.

“If we have learned something these days, we should work together. All together. Because although some insist on presenting this problem as a war, the truth is that it is not so different from the crossroads that all the great cities of the world live,” it writes.

“And at this crossroads, it is in our hands to decide which path we want to take. We can restrict the new mobility alternatives, or we can start working to achieve the objective that we share with the Government, the City Councils, the taxi sector, the VTC and Uber: that fewer private vehicles circulate on our streets every day.”

The company also makes a direct plea to taxi drivers to work with it by backing deregulation of the taxi industry, instead of a cap on the number of VTCs.

“We firmly believe that the solution is not to restrict the VTC, but to make the taxi more flexible so that it can compete better. So you can compete with Uber, not against Uber. Uber and the taxi? It may sound weird, but it is not. We already do it in several cities around the world, and we want to do it in Spain,” it writes.

“It is not about VTC or taxi. It is about that, little by little, we learn to work together to fulfill the objective of all: that you leave your car at home.”

An Uber spokesperson we reached for comment also told us: “The ways people move around cities is changing around the world — we want to partner with all local stakeholders, including taxis, to build better cities in Spain together.”

A spokeswoman for Cabify said the company did not have anything to add beyond its statement last week when it also made a similar plea for stakeholders to unite around a multi-modal urban transport mix — writing then: “We believe that unilateral solutions are not the right solutions to build the mobility of the future and that all players must work together with the administration in order to find the way to ensure the market’s evolution and the protection of all of those who operate in it.”

However the taxi industry’s attacks on the ride-hailing companies include claims that their platforms create precarious ‘jobs’ and underpay their workers.

Neither Uber nor Cabify’s public statements have engaged with that critique.

The most recent taxi strikes started last month in major cities including Spain’s capital Madrid and in the capital of Catalonia, Barcelona.

The strikes were initially scheduled to run for two days but the drivers changed up a gear — announcing a huelga indefinido and going to on spend almost a week blocking streets and making life especially miserable for suitcase-laden summer tourists trying to make trips to and from airports.

There were also violent scenes witnessed on the first day of the strike in Barcelona — which drew widespread condemnation after cars were damaged and there were reports of drivers being attacked and threatened.

The violence was not repeated after appeals for calm, including from one of the main taxi associations organizing the protest action.

This same organization, the Elite Taxi association, has since tweeted that Barcelona taxis have been offering free trips to hospitals to improve relations with citizens.

Uber and Cabify pause services in Barcelona after taxi strike turns violent

A two-day taxi driver strike in Barcelona this week, called to protest against the number of ride-hailing vehicles on the streets and failure to enforce national regulations that are supposed to cap private hire vehicle numbers, turned violent yesterday with protestors attacking cars and local media reporting attacks on drivers too. The violence has led […]

A two-day taxi driver strike in Barcelona this week, called to protest against the number of ride-hailing vehicles on the streets and failure to enforce national regulations that are supposed to cap private hire vehicle numbers, turned violent yesterday with protestors attacking cars and local media reporting attacks on drivers too.

The violence has led to a temporary suspension of all vehicle for hire services (VTC) in the city — thereby also including Uber and Cabify, both of which only run licensed driver services in the country.

Local newspaper La Vanguardia reports that drivers and even passengers were attacked during protests yesterday.

An Uber spokesman confirmed that some of its drivers had been attacked by protestors, telling us: Rider and driver safety is our top priority. As a result of yesterday’s serious attacks the apps for professional licensed drivers have collectively decided to temporarily pause operations in Barcelona.”

A Cabify representative confirmed its service remains suspended in Barcelona. It also condemned how its drivers were being “daily intimidated for simply exercising their right to work”.

“We firmly reject the hostile and violent environment that unwound yesterday in the city of Barcelona. Cabify respects any company or professional group’s right to strike as well as it respects the right of those who wish to continue to develop their activity under normal terms, whether they are taxi or VTC drivers,” it told us in a statement.

“We consider that the citizens and visitors of the city of Barcelona, which at this time of the year is at its peak season, have the right to move through the city and enjoy quality minimum services as well as other urban transportation alternatives they may need or desire.”

Taxi drivers are angry that the supposed national ratio of one professionally licensed vehicle for hire (VTC) per thirty taxis is not being upheld. The ride-hailing giants have been buying up licenses from other operators to ramp up their presence.

At the same time city authorities have been attempting to enforce the ratio via local regulation — which the VTC sector has challenged in the courts.

Unauto VTC, a local association which represents the interests of the vehicle for hire sector, recently brought a challenge against an attempt by city authorities to impose its own VTC regulations — and succeeded in getting it suspended by the High Court over the potential impact on drivers and citizens.

In a statement announcing the VTC service suspension yesterday and condemning the violence, Unauto VTC says the taxi drivers were protesting that court decision.

Although taxi drivers responding to the association’s Twitter account accused the body of cherry picking the laws it supports and ignoring those it does not.

The nationwide situation in Spain is that VTC licenses have been capped at a 1:30 ratio since 2015 but the cap faces legal challenges and is seemingly not being actively enforced — thereby allowing ride-hailing companies to circumvent it by buying up licenses from other operators.

At the same time, Spain’s Competition Authority has been pushing for gradual deregulation of the sector. While taxi associations have been pushing back with strikes and protests — the latest of which has seen drivers attacked and cars smashed and sprayed with paint stripper.

According to La Vanguardia, Unauto VTC’s president, Eduardo Martin, said he had seen evidence of “two serious assaults” during protests in Barcelona yesterday where the victims had to be taken to hospital.

“A driver has been burned with acid on his face, with which they use to burn the paint of the vehicles, and another has been beaten and has been transferred unconscious to the hospital,” he told the newspaper.

The mayor of Barcelona, Ada Colau, who has driven the city’s attempt to regulate the VTC sector to protect the taxi industry, condemned the violence in a tweet — writing that while everyone supports the taxi sector no one supports the violent acts seen on the streets of the city yesterday.

Her tweet linked to a video showing a group of protestors violently attacking a Cabify car which is said to have contained a French family. La Vanguardia’s report contains similar images of violent protest.

In its statement, Unauto VTC said it made the decision to temporarily suspend private hire vehicle services in Barcelona in light of the level of violence perpetrated by what it described as “radical groups”.

“Despite having experienced episodes of violence on other occasions, the gravity of various attacks suffered this morning in Barcelona obliges the sector, including Uber and Cabify, to temporarily suspend activity in Barcelona until the situation returns to normal,” it writes.

It goes on to express “total support for all drivers attacked today in Barcelona and thousands of drivers throughout Spain”, and to apologize to “the thousands of passengers who trust us to move around Barcelona every day”, adding: “We will work with the authorities so that the perpetrators are arrested and tried.

“We ask for the protection of the institutions and state security forces to put an end to this situation and protect the thousands of workers in the VTC sector, who are not only denied their right to work but also see their physical integrity increasingly threatened.”

A local taxi association, Elite Taxi BCN, also put out its own communique yesterday — condemning the violence and appealing for calm.

In the statement it writes that the images of taxi drivers fighting in the streets will only harm the sector, and goes on to call for peaceful protest.

“They are not going to shut us up in any way, we are not going to accept this corrupt situation which we will not refer to in any other way. Our fight is and will be focused on the courts to get to the end of this rot… no matter how much it costs us,” it writes. “We ask for peace and calm and maximum respect — especially for the people.”

Uber only returned to Barcelona in March — buying its way into the VTC sector by shelling out to buy licenses from an existing operator. The company began with 130 drivers but will not disclose how many are now operating in the city.

The company does not operate its p2p non-professional driver service in Barcelona. Nor in Madrid, where it also operates in Spain. Nor indeed in the vast majority of Europe where it says it operates under existing transportation laws, i.e. using only licensed drivers.

Barcelona taxi associations have a long history of fighting Uber. It was a legal challenge lodged in the city against the company’s unlicensed p2p services that went all the way up to Europe’s top court — where judges last year ruled that Uber is a transportation company not a tech platform, thereby outlawing its earlier expansionist playbook of taxi law circumvention.

The CJEU decision has locked in the strategic gear change Uber has made in Europe in recent years, in the face of a series of (at times violent) protests — focusing on lobbying national and city regulators to liberalize and reform taxi rules in its favor.

This month, for example, it relaunched a service in Finland after suspending operations last year to wait for reforms to be passed.

For its part, Cabify, a Spanish ride-hailing startup which also operates in Latin America, argues that “the taxi is not our competitor” — saying its founding mission has been “to replace the use of the private vehicle as a means of transportation inside the city”.

“More than 50% of the commutes done within the city are made by private cars and the only victory we aim to is to reduce that percentage as far as possible,” it told us. “If we reach that goal, this could represent the increase of demand for alternative mobility services such as ours and taxi’s, being a common goal that would benefit us all.”

Commenting on the VTC regulation that’s been proposed by the city of Barcelona (but blocked by the court), it called for joint working between all the stakeholders to modernize laws without undermining protections.

“We believe that unilateral solutions are not the right solutions to build the mobility of the future and that all players must work together with the administration in order to find the way to ensure the market’s evolution and the protection of all of those who operate in it,” it said.

“Thus, we believe that the final consumer, as one of the most affected parties in the present and futures decision regarding the sector, deserves to be heard and contemplated in all analyses. Cabify counts with more than 3 million users in Spain whom have found usefulness in the service we provide through our app,
which they’ve rated as 4.77/5.”

But Cabify has also been taking a leaf out of Uber’s old playbook by emailing its user-base to mobilize them to lobby online on its behalf — using the hashtag #HaciaDóndeNosMovemos

There’s no official word on when VTC services will resume in the city — but it seems likely the industry suspension will be lifted once the taxi strike concludes tomorrow evening, if not before.