Spain’s curbs on Uber-style apps face probe over breach of EU law

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Brussels has begun a preliminary probe into whether moves by the Spanish government to protect the taxi industry by limiting private hire services such as Uber, Bolt and Cabify breach European law. 

Ride-hailing apps have been fighting for years to unlock the Spanish market, one of their largest sources of untapped growth in Europe, in the face of repeated attempts by city authorities to limit the number of licences available to private hire vehicles. 

The EU’s inquiry, or “pilot procedure”, is in response to industry complaints over fresh curbs that Spain’s national government introduced last month on the transport apps. Madrid set “environmental and traffic management criteria” as part of those regulations, designating the traditional taxi industry a “public interest service”. 

These latest measures from Madrid came days after a European Court of Justice ruling that appeared to mark a breakthrough for the app makers. The ECJ ruled on June 8 against the city of Barcelona, finding that its restrictions on ride-hailing services were “contrary to European law”, in part because they were designed to insulate regular cabs from new app-based competition. 

Feneval, an industry group representing the ride-hailing companies, this month wrote to the EU transport commissioner arguing that the latest measures, enacted by royal decree in the run-up to the July 23 Spanish election, were a “clear breach” of the ECJ ruling. The group demanded an “infringement proceeding” against the country. 

According to the EU’s response to Feneval, which has been seen by the Financial Times, this initial probe was seeking to “better understand Spain’s reasoning” regarding a number of rules concerning taxis and private hire vehicles in the country.

An EU official confirmed that the commission had received “several letters” from industry and was “already in dialogue with Spanish authorities about how their approach is in line” with Article 49 of the EU treaty, as part of a “broader assessment” of Spanish law in this area. 

However, a spokesperson for the Spanish transport ministry said they were not aware of any investigation by Brussels. The new regulation “focuses on proportionality, fair competition, and the protection of the general interest and the environment”, the ministry said.

New private hire vehicle licences will be “subject to compliance with criteria aimed at improving air quality, reducing emissions, and managing traffic and public spaces” in the local authorities that are responsible for granting them, the ministry added.

A pilot procedure is an initial probe that can form the first stages of more formal infringement proceedings against an EU member state, though the commission’s inquiries do not always go further. Inquiries into the Spanish law had already begun before the ECJ’s ruling, the commission said, but it will now also assess the royal decree.

“These answers should help commission services to assess whether these rules are in breach of article 49,” officials at the transport commissioner’s office wrote. 

Restrictions on ride-hailing apps have put Spain, alongside Japan and Italy, among the toughest markets in the world for services such as Uber. A relaxation of what the tech platforms described in their letter to the EU as “disproportionate and discriminatory restrictions” on their operations could provide a valuable source of growth.

While Spain is facing the EU probe, authorities in Italy have received criticism for long queues at taxi ranks at airports and stations during the recent heatwave, adding pressure on them to grant more licences to private hire vehicles.