The recent Judgment of the Court of Justice of the European Union (CJEU), of June 8, 2023, has declared the restriction on licenses for the rental of transport vehicles with driver (VTCs) called the ratio 1:30 contrary to Community Law ( 1 VTC license for every 30 taxis), adopted in 2018 by the Barcelona Metropolitan Area (AMB) – a measure that is also included in the national land transport legislation.
According to the CJEU, both the aforementioned ratio and the requirement of a second authorization are restrictions on the freedom of establishment, since they limit access to the market. Such restrictions can only be justified by an overriding reason of general interest and must respect the principle of proportionality. Even though the CJEU accepts that the good management of transport and the protection of the environment can be general interests worthy of protection, it denies that the restriction on the number of licenses was appropriate and proportionate for such purposes.
The Judgment is interesting because it does not stop at the AMB regulation, it goes further and affirms that guaranteeing the economic viability of taxis or preserving the balance between taxis and VTCs –objectives with which the authorities in Spain have been justifying the restrictions adopted in recent years at all levels (national, regional and local) – has a purely economic nature and cannot constitute an overriding reason of general interest. Thus, the CJEU prohibits, as discriminatory, measures that seek to guarantee the profitability of the taxi service or preserve that supposed balance, to the detriment of other competitors.
For its part, the European Commission, in a 2022 Communication, already pointed out the duty of the authorities to respect the fundamental freedoms on which the single market is based, demanding that the Member States adapt the current regulations in this sector to the Law of the EU. Restrictions on the freedom of establishment can only be supported by legitimate objectives, be proportional and non-discriminatory. The Commission criticized in its recommendations the obligations imposed on VTCs without legitimate justification, such as the “return to garage” rule or the establishment of a waiting time between the reservation and the start of the service.
In our country, several judgments have also been handed down in recent months (including by the Supreme Court) declaring contrary to the freedom of business recognized in the Constitution and the Market Unity Guarantee Law, the regulations of some autonomous communities with restrictions on the VTCs, including, for example, the minimum waiting time and the prohibition of geolocation. Likewise, other municipal restrictions have been declared illegal, such as those referring to the contracting period, the prohibition of parking on public roads or at a certain distance from stations, airports or the like, and the obligation to purchase zero-emission vehicles. All these resolutions have justified the Spanish competition authorities in their challenge to this type of measures as they are contrary to free competition and market unity.
However, there are still other restrictions in force, which -in order to comply with Union Law and other Spanish regulations- should disappear, such as the one imposed by the colloquially known as “Ábalos Decree”, which since October 2022 only allows long-distance services, as they are also contrary to the fundamental freedoms of the single market.
The regulator’s mandate could not be clearer: restrictions that discriminate against VTCs over their competitors –taxis– cannot continue to be protected, based on their economic protection, nor can they hide behind general interests (for example, the environment ) to impose unequal treatments that are arbitrary. Obviously, restrictions on VTCs cannot be justified for environmental or traffic reasons that do not affect taxis on equal terms.
The sector will continue to evolve and the public powers must assume –as this is clear from recent court rulings– that excess protection in favor of a competitor is prohibited. The regulation in this matter must abandon unfair and offending preferences or privileges. So much so, that perpetuating discriminatory restrictions against the constitutional principle of interdiction of arbitrariness, could even entail personal responsibilities in the criminal sphere. In this sense, it should be remembered that the Supreme Court in the ERES case (STS 749/2022, of September 13) considered that the resolutions that make up the procedure for drafting laws are an administrative matter and, therefore, capable of integrating the crime of prevarication.
