The CNMC and private hire vehicles: New actions in favor of liberalization

The Spanish National Markets and Competition Commission (CNMC) continues its struggle to develop a regulatory framework without unfair discrimination between the taxi sector and the private hire sector (vehículo de transporte con conductor, “VTC”). Last July 4, it issued a report analyzing certain aspects of the Madrid City Council’s draft ordinance to regulate private hire vehicles, and on August 2, it announced that it would appeal the Regulation of the Barcelona Metropolitan Area on private hire vehicles.

In the Report on the Madrid City Council’s draft ordinance regulating private hire vehicle services, the CNMC found that the measures included in the draft ordinance discriminate between the taxi sector and the VTC sector, that the negative consequences of pollution cannot be exclusively linked to the private hire sector, and that there are other less restrictive measures on competition to fight congestion and environmental problems in the city of Madrid (e.g., encouraging the use of green vehicles, boosting public transport or adding congestion charges).

The CNMC identified four measures included in the draft ordinance as anti-competitive practices:

• Banning VTCs from stopping or parking less than 100 meters from the perimeter of airports, railway stations and bus stations;
• Banning VTCs from driving or stopping in bus lanes;
• Establishing the same timetables and calendars as taxis; and
• Restricting driving with no passengers according to the vehicle’s environmental classification.

As an alternative to these measures, the competition authorities proposed (i) sharing the space reserved for taxis in airports, railways stations and bus stations or limiting the restriction to the least congested times of day; (ii) allowing the use of the bus lane by VTCs; (iii) freeing the number of working hours for taxi and VTC drivers; and (iv) encouraging replacement of vehicles for more environmentally friendly models.

In addition, the CNMC announced that it will appeal the Regulation of the Barcelona Metropolitan Area on private hire vehicles because it believes that certain articles restrict competition and are not compliant with the principles of non-discrimination, necessity and proportionality.

Other measures of the regulation include a ban on geo-location for private hire vehicles prior to booking the service, a ban on private hire vehicles parking and driving on public highways when they are not booked or carrying a passenger, and the obligation of keeping at least 60 minutes between the booking and the start of the service.

The CNMC has already exercised its powers to challenge Barcelona’s regulation of VTCs under section 5.4 of Act 3/2013, creating the CNMC, and section 27 of Act 20/2013 on guaranteeing market unity. In July 2018, the CNMC appealed another regulation on VTCs in the Barcelona metropolitan area, which is currently stayed following the decision of the Catalonia High Court of Justice to take interim measures until the matter is settled.

These actions are added to the long list of steps by the CNMC in the taxi and private hire sectors in recent years, including:

• Seeking the invalidation of certain sections of Royal Decree 1057/2015, of November 20, amending the Regulation on the Ground Transport Act, which we discussed in this blog post;
• Preparing a report on Royal Decree Law 13/2018, of September 28, amending Act 16/1987, of July 30, on organizing ground transport in respect of private hire vehicles (see here).
• Publishing the declaration from the working group of advice from the competition authorities on the new regulation on private hire vehicles, together with eight regional competition authorities (see here).

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