Decree 1076/2017 on ride-hailing services (VTC)

The Royal Decree 1076/2017 came into force on 29 December 2017. It establishes complementary rules to the Regulations of the Act Organising Land Transport (ROTT). The decree prohibits the transfer of VTC licenses within the first two years from the date of issuance. Secondly, it lays out that VTC licence holders (who are usually not the drivers themselves, but rather the company or fleet, which they work for) must notify the authorities of the route before carrying out the service by electronic means. 

These obligations were objected by ride-hailing platforms such as Uber. In 2018, the Spanish Competition Authority (CNMC) filed an appeal against the Royal Decree after publishing an official report stating that the obligations contained in it constituted a restriction of effective market competition. In particular, the CNMC argued that the prohibition of transferring licenses within two years was an unjustified entry barrier. It also held that the obligation to communicate each service in advance was an administrative burden contrary to the principles of necessity and proportionality. 

On the contrary, representatives of the taxi sector argued that similar limitations had already been implemented in different cities and that the restriction on the transferring of licenses is the general rule. In addition, they claim that the obligation to inform authorities about the routes in advance of each service is also not a new requirement, given that such an obligation was included in previous rules to trace the ‘roadmap’ of the drivers, and that it had simply been modernised by the use of electronic means. 

The Supreme Court sided with the CNMC and Uber in a judgement that orders the overriding of the restrictions imposed on the VTCs. This decision is based on the application of the Spanish Act 25/2009 of 22 December (known as the ‘Omnibus Law’) on the liberalisation of various service markets, which removes the limitations and restrictions provided, unless they are established for an urgent reason of general interest. The Spanish Supreme Court has concluded that the aim of preventing speculation regarding licenses cannot be considered as justified on the grounds of general interest. 

Further information: 

The Spanish Supreme Court overrides the restrictions imposed on ride-hailing services (¨VTCs¨) (twobirds.com) 

Metadata

  • Initiative
  • Arbitration, Code of conduct, standards
  • Spain
  • Business association, Employee organisation, Government
  • Yes
  • transport
  • On-location platform-determined routine work
  •  Uber
  • Sector aspects, competition, lobbying
  • Spanish
  • 2021
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