Carlos Rodríguez – Spain: Uber and Corruption in Madrid 

The Spanish right-wing Popular Party (PP), notorious for its corruption, now runs the regional and city council of Madrid. They are using their new-found power to liberalise the taxi sector in the Spanish capital. Unsurprisingly, the links between senior figures of the PP in Madrid and digital platforms Uber and Cabify run deep, Carlos Rodríguez of Taxi Project 2.0 explains.

Carlos Rodriguez Expósito is a specialist in telecommunications. Community Manager of Taxi Project de Élite Barcelona. Collaborates actively with the space No Mas Precariedad, formed by dozens of collectives in struggle and with 404 Comunicación Popular, the media of the social groups.

Translated and Edited by BRAVE NEW EUROPE

Puede leer este artículo en español aquí

This series of articles concerning the Gig Economy in the EU was made possible thanks to the generous support of the Lipman-Miliband Trust

The history of the EU has been the destruction of social and economic structures in member states in order to further the interests of international corporations. There is no aspect of life or field of business that is being left unscathed by the EU’s campaign of neo-liberal destruction. The political class in the EU has learned to use this process for its own financial ends. Madrid’s traditional independent taxi drivers are among the newest victims.

To understand what is happening in Madrid today in the taxi sector, we have to go back to 2009, when the Social Democratic PSOE government of José Luis Rodríguez Zapatero transposed the European directive 123/2006 in the so-called Omnibus Act (Law 25/2009). This law eliminated what is known as the 1/30 ratio, which had been applied since 1998. This meant that, in order to preserve the taxi as a public service of general interest, for every 30 taxis there could only be one private VTC (a private chauffeured transport vehicle). 

When this ratio was eliminated, the compliance with the European Directive 123/2006 was fatally weakened, because this required measures to protect and prevent the liberalisation of the taxi service. By eliminating the 1/30 ratio, thousands and thousands of VTC authorisations could be created, in violation of the directive. 

Many taxi drivers were not aware of the danger then because Uber was still not very well established in the Spanish state. Nor could they know that a group of leaders of very important taxi associations would turn against their own members and workers, taking advantage of this new loophole to request these newly available VTC authorisations. Today, their fleets are the largest of the VTC sector and they work for the international digital platforms Uber and Cabify. The taxi driver of Spain was betrayed by his own representatives. 

The 1/30 battle

In 2015, the 1/30 ratio was reinstated in Spain by means of a Royal Decree, but intentional of not, it was not well formulated leaving lots of loopholes. The revocation of the excessive number of VTC authorisations was reinstated in 2018 when the Decree was raised to the status of a law, thanks to the support of Podemos and the PSOE, so that no more authorisations were permissible.

A VTC authorisation cost was €36 for administrative fees, but were then sold for €7,000-8000 on the free market, in packages of hundreds or thousands of authorisations. This was a great business for people related to the Madrid City Council or other administrations and for Cabify, which owned the majority of the city’s VTC licenses in circulation, as they proceeded to inflating the prices by manipulating the market through political channels. 

In 2018, shortly before this royal decree was passed into law, Uber, together with the CNMC (the national competition authority) denounced the 1/30 ratio and opposed taxi drivers at the Supreme Court, the highest court in Spain, by filing an appeal. The Court ruled in favour of the taxi sector indicating that the 1/30 was in accordance with the law, being a measure to preserve the taxi as a service of general interest.

However, because of the mistakes of politicians and then because of the betrayal of taxi managers, thousands of VTC authorisations had entered into functioning between 2013 and 2015. Therefore, in July 2018 there was a great mobilisation of the taxi sector at national level, which forced the PSOE government to pass a new decree to try to alleviate this situation. 

The resulting Ábalos Decree transfers the jurisdiction in the field of transport from the central government to the regional governments, which are the ones that grant the interurban licenses (permits for transport between autonomous communities) and to the city councils, which from then have the power to take measures that allow the reduction in the number of VTC authorisations. However, this reduction is not immediately applicable. A four-year moratorium was established in order to compensate the alleged financial loss suffered by owners of the VTC’s. In other words, by September 2022, vehicles without an urban license will be illegal. 

The PP takeover in Madrid

This Decree was drafted as a solution by the Government to compensate for the failure to comply with the Supreme Court’s endorsement of the 1/30 ratio. In Madrid, taxi associations began to apply pressure demanding more regulation for the VTCs, through a strike that lasted 16 days. The City Council, at that time led by the left-wing Ahora Madrid, passed an ordinance in which the method for removing VTC vehicles was by limiting the number of vehicles working by 25 per cent during the week and up to 50 per cent in the weekends. 

Following the municipal elections in 2019, Ahora Madrid was replaced by the right-wing neo-liberal coalition led by Partido Popular (PP), notorious for its corruption. The Community of Madrid led by the PP, instead of taking regulatory measures against the VTCs, did exactly the opposite. That is, the PP allowed the entry of large companies as taxi license holders to the detriment of the small self-employed. This measure also benefited the entry of Uber and Cabify as they are intermediaries working exclusively with large fleets, which allows for a high volume of turnover.

This was the first step towards the liberalisation of the taxi service and is contested by several associations such as the Madrid Taxi Federation and from us, Taxi Project 2.0.

On of the first measures by the newly elected PP-led city council was to repeal the Ordinance of the VTC written by the previous left-wing city council of Ahora Madrid, and announce that they were going to introduce an ordinance to liberalise the taxi sector. At the same time, the Community of Madrid is creating another law tailored to Uber without any time restrictions or based on any mobility or environmental criteria. They are widening the activity of these types of vehicles and asphyxiating the small self-employed, as Uberisation means the over-saturation of taxis just when there is no demand following the pandemic.

Revolving doors

This is the situation today in Madrid. It is a deliberate undermining of the Ábalos Decree which was tailored-made to restrict Uber’s model. The government put the solution in the hands of the autonomous communities and the city councils, and in Madrid politicians are passing the laws that Uber dictates to them. They have done the same with health, education, and infrastructure in the past. Their policy is to privatise everything publicly owned, usually to their patrons and cronies. In the case of transport, beyond the impacts on mobility this privatisation will have negative impacts on our health since it allows these companies to operate without controls, polluting the air, generating noise, and endangering pedestrians by increasing the number of private vehicles in the city center.  

It is important to note that the new director of Communication of the vice-presidency of the Community of Madrid, Carla Cabedo, is a former director of communication for Uber, and that the former councilor of the Competition Authority for the Telecoms markets, Marta Plana, is now working for Cabify as the person Responsible for Global Regulation and Public Affairs. Also, the person in charge of institutional relations at Uber is the former MP for the Popular Party, Ildefonso Pastor, and the head of the VTC employers’ association, José Luis Funes, has also appeared in several lists of this political party.

Uber has been spreading false news for months, announcing that there are hundreds of taxi drivers working with its app, although this is not true. The taxi drivers that use Uber’s app are employees in transport enterprises whose main activity is focused on VTC and that use Uber and Cabify as their main digital platforms. This is a very minor proportion of the taxi sector.

My theory is that once this plan for penetration into the taxi sector has been completed, it will be a good showcase to obtain public funding and subordinate all city’s transport enterprises to their operating system. Their strategy is monopolisation: every trip made in a city must go through their app, so that they can always extract a rent through a fee. This is what we are up against.

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