Rules to rein in ride-hailing apps coming to Barcelona

Catalonia’s regional government in Spain has agreed new rules to regulate the vehicle for hire (VTCs) sector that will require ride-hailing companies such as Uber and Cabify to substantially change how they operate in Barcelona and other local cities as soon as this week.

The changes have been agreed by decree, ahead of a planned full restructuring of the law, with the Catalan generalitat saying it wants to ensure VTCs and taxis do not compete for the same work.

As a first step, the government says it will introduce a new rule that requires VTC bookings to be made a minimum of 15 minutes in advance of a pick-up, with municipalities or local metropolitan areas able to require a longer wait time.

It writes that such powers can be used to regulate “the use of public road domain, urban traffic management, environmental protection and the prevention of air pollution”.

Ride-hailing companies Uber and Cabify have previously said they will pull out of the Catalan capital, Barcelona, if a 15-minute wait time rule is introduced. But even if the companies change their mind about leaving they would likely have to suspend services to implement software tweaks to their apps to comply with new restrictions on how VTCs can operate. 

Under the decree, VTC companies will also be prohibited from displaying the real-time geolocation of vehicles for hire in their apps prior to a booking. Only once a booking has been made can the location of the vehicle be displayed.

The decree also bans VTC vehicles from plying for trade by freely circulating in the streets. Instead they will be required to return to a base, such as a parking lot or a garage, to wait for the next booking.

An Uber spokesman told us it’s not commenting at this stage as it waits for the decree to be published later this week.

The decree, which will be published on Thursday, is due to come into force next Friday, according to El Confidential. Although it will also need to be approved by the Catalan parliament — with a month provided for that process.

The Catalan government says fines of up to €1,400 (~$1,600) can be applied to VTC drivers caught infringing the provisions.

Local authorities will be allowed to create a register of VTC vehicles providing a service in their region, with local police forces tasked with carrying out inspections of suspected infringers.

“Impossible for us to continue… “

Safe to say, the incoming regulations aren’t popular with ride-hailing companies.

Last week an Uber spokesperson told us: “If approved, announced restrictions in Catalonia would make it impossible for us to continue offering our UberX service in Barcelona. We continue to call for dialogue with all local stakeholders, including taxis, to find a path forward for the thousands of drivers and users who rely on VTC services in Catalonia.”

A Cabify spokeperson also told us then that if the restrictions were approved the government “will essentially be forcing Cabify out of Barcelona and going against the interests of one million registered users and the wider VTC sector operating in the city”.

“Cabify is absolutely committed with Barcelona and its users, as it does in the 130 cities where the Company operates globally. In case negotiations don’t change this wrong decision, our strategic road map will remain the same. Innovation and Technology are our main drivers to improve mobility in the markets we operate,” the spokesperson added.

At the time of writing Cabify had not responded to a request for comment on the decree being agreed.

Earlier this month another round of taxi strikes kicked off in the Catalan capital, with local taxi drivers also furious about the proposed 15 minute wait. But they couched it as not stringent enough — calling for a minimum of at least 24 hours.

That huelga indefinida of taxis only ended after Barcelona’s mayor pledged to extend the minimum wait time to an hour, reports El Confidential.

The taxi industry’s complaint and long-time beef with ride-hailing companies is the apps represent unfair competition, with VTCs firms accused of operating a taxi service without having the same regulatory burden as taxis.

Last summer another series of taxi strikes in major Spanish cities only ended after the country’s government agreed to devolve regulatory power over the VTC sector to autonomous communities. And Catalonia is the first region to have pushed ahead with applying controls to the sector.

Though its planned changes are clearly not without controversy — and a slick PR campaign by a Spanish VTC association has pushed an online petition to close to 150,000 signatures. (Although local press reports that a signed-in-person petition against the decree that was handed to the Catalan government only had around 10,000 signatures.) 

Meanwhile, the looming prospect of the world’s biggest mobile tradeshow, Mobile World Congress, is likely concentrating local politicians’ minds. The event takes place in Barcelona in just under a month’s time, and in recent years it’s been a strategic ratchet for taxi associations to amp up the pressure of threats to ‘paralyze the city’.

This month the VTC sector has also taken to Barcelona’s streets, albeit to protest a little more quietly. Drivers parked their vehicles along a major road in protest at the proposed changes and some demonstrated outside parliament.

In a tweet in the last few hours following the announcement of today’s decree, the Unauto VTC association claims the sector will have no option but to quit Barcelona, saying it puts 1,000 drivers out of work.

Early reaction from the taxi industry to the government decree is jubilant — with one of the main associations campaigning for tighter regulation on the VTC sector, Elite Taxi BCN, tweeting a government response which gives short shrift to the VTC sector’s claim the changes mean the instant sack for thousands of VTC drivers.

In the cited quotation, the government also dubs the decree “proportionate and competitive”.

“We will not yield to the blackmail of the street nor the blackmail of the offices,” it adds.

The taxi industry’s campaign has also focused on criticising working conditions for drivers in the VTC sector, and claiming multinational companies like Uber offer only precarious work, rather than sustainable employment.

And there is certainly a large chunk of irony in a sector that contains gig economy platform giants trying to argue tighter controls will make its drivers ‘unemployed’ (when Uber, for example, classifies drivers as self-employed contractors, never employees… ).

If Uber does pull out of Barcelona it won’t be the first time either.

The company only relaunched a service in Barcelona last March after its original p2p (non-professional driver) play was forced out in late 2014, following legal challenges driven by the taxi sector.

For the relaunch Uber bought its way in by paying to obtain VTC licenses from existing operator/s. It’s unclear how many Uber drivers operate in the city but Barcelona remains very well served by affordable and accessible public transport options — in addition to plentiful taxis.   

Taxi associations in Madrid have also been striking in protest at VTCs this month, bringing a major road in the Spanish capital to a standstill, per this Reuters report.

There taxi drivers want the government to uphold a ratio of 1 VTC per 30 taxis as a matter of urgency, rather than giving VTC companies four years to comply with the regulation, as it said it would last fall.