European Courts overturn limits on ride-hailing services such as Uber and Cabify in Barcelona

The Court of Justice of the European Union (CJUE) overturned the limits on ride-hailing services such as Uber and Cabify in Barcelona to one vehicle per 30 cabs in Barcelona's metropolitan area (AMB), which is against European law, judges ruled on Thursday.

Magistrates say that limiting the number of VTC (vehicles de transport amb conductor—private hire vehicle in English), "as it currently exists in the AMB, is contrary to the freedom of establishment under Article 49 TFEU, in so far as the ratio of 1 PHV license to 30 taxi licenses is concerned. It constitutes a disproportionate restriction on that fundamental freedom," the court's opinion says after receiving in 2021 a request for a preliminary ruling from the Catalan High Court (TSJC).

Judges believe a restriction on the freedom of establishment "cannot be justified unless it serves, in the first place, an overriding reason relating to the public interest and, in the second place, observes the principle of proportionality, meaning that it is suitable for securing, consistently and systematically, the attainment of the objective pursued and does not go beyond what is necessary to attain it," the text reads.

Nevertheless, the CJUE considers "the objectives of managing local transport, traffic, and the use of public space to constitute an overriding reason relating to the public interest. Cities and agglomerations are interested in providing free-flowing traffic, avoiding congestion, and, more generally, providing public spaces that guarantee a high quality of living."

The Court is responding to the preliminary ruling from the TSJC after Prestige and Limousine, S.L., a company owner of several private hiring vehicles in the AMB, filed a complaint against the legislation affecting VTC in the area and asked for its suspension.

Companies owning VTC said that the legislation's limits and restrictions were to complicate these enterprises' business activity and protect the taxi sector's interests.

Taxis celebrate ruling

Taxi drivers celebrated the ruling, however, as the CJUE does consider establishing some restrictions in the city. 

According to Tito Álvarez, spokesperson for the Élite Taxi union, European judges opened up the possibility for cities to manage the number of licenses based on concerns over traffic management, the use of public space, and environmental reasons.

Álvarez also commented that he received a report from the city council that stated the reasons why the VTC licenses should be limited.

“We are happy because we can justify with data that there cannot be more private hire vehicles in the Barcelona Metropolitan Area," the union representative added. 

However, Tito Álvarez also mentioned that some coastal areas, such as the Costa Brava in the northern part of Catalonia, or the Costa Daurada to the south, will see an "invasion" of ride-hailing services and an "indiscriminate liberalization" of rental vehicles.

These are areas that do not have joint service areas or any such report against the entry of more private hire vehicles as is the case with Barcelona, according to Álvarez.