“Welcome to Hell”: Barcelona Taxi Drivers Prepare for Uber’s Return

Yves here. Unions in Europe have not forgotten how to play hardball. But will it be enough to impede Uber?

By Don Quijones of Spain, the UK, and Mexico, and an editor at Wolf Street. Originally published at Wolf Street

Uber has struck a more conciliatory approach this time, but taxi drivers are not convinced.

War is about to break out once again between Uber and the highly mobilized taxi drivers of one of its most febrile markets, Barcelona. After three years of absence due to regulatory issues as well as the hostile welcome it received from local taxi associations, the ride-share giant announced this week that it was returning to Spain’s second largest city.

This time will be different, it says. “We are changing the way we work. And Barcelona is no exception. We want to work with local agents to help build a mobility model that is more sustainable,” said the company in a statement. The company has long shown a special interest in the Catalan capital because of its tourist influx and potential for business.

Uber marked its Barcelona comeback by placing over 100 advertisements around the city with the tagline, “More than a journey. Barcelona, your Uber has arrived.” In less than 48 hours, around half of the ads had been defaced, with the word “Uber” replaced by the word “taxi.” The company’s logo was also concealed and the image of an Uber vehicle swapped for that of a black-and-yellow Barcelona cab.

That was just the beginning. On Thursday night, an estimated 300 taxis blocked access to the city’s main bus station, Estacio Nord, to prevent the departure and entry of buses belonging to the transport company Alsa Coaches, which has been closely linked to the sale of the VTC licenses that allow ride share drivers to operate in Spain.

Due to loopholes in Spanish law, companies have managed to rack up indecently large profits by buying up batches of these permits from local councils for as little as €32 a piece and then selling them on to ride-share drivers for tens of thousands of euros. In Madrid VTC licenses can sell for as much as €65,000 each. When the Community of Madrid finally cottoned on to the scam, it refused to continue selling the licenses. But the decision was appealed by the same rent-seeking transport companies, and Spain’s Supreme Court predictably ruled in their favor.

Other irregularities and abuses abound in Madrid’s burgeoning ride-share business. In the last year the police conducted 10,128 inspections of passenger transport vehicles with up to nine seats. The infraction rate of the vehicles operating with Uber and Cabify was a staggering 42%. Also, by law there is supposed to be a maximum of just one VTC license for every 30 ride-share vehicles but that number is allegedly on the rise.

Taxi drivers in Barcelona worry that Uber will show the same disregard for the law in Barcelona as they have done in Madrid. A common fear is that the “cockroaches” — as the black cars used by Uber and Cabify drivers are endearingly termed — will once again concentrate their activity in high-wealth areas, which is prohibited in the current Royal Decree on the Regulation of Land Transport.

Uber has struck a more conciliatory approach this time around. “In recent weeks we have spoken with representatives of Catalonia’s regional government, parliamentary groups, competition regulators and also with the Barcelona City Council,” said Juan Galiardo, Uber’s director for Spain. “Our starting point was to explain that we are coming back, that our model is legal, that we want to do things well. There is a market for everyone.”

Many taxi drivers are not convinced. Following the announcement of Uber’s return, Alberto ‘Tito’ Álvarez, spokesperson of Elite Taxi Barcelona, the taxi drivers’ association that organized the boycott of Alsa Coaches, delivered a stark message: “Uber and Cabify drivers, welcome to hell!”

In Madrid tensions between taxi drivers and car-share drivers recently escalated into violence as around 50 ride-share cars were pummelled with stones and showered in acid. Elite Taxi has already warned that it plans to take industrial action against Uber every day next week.

Given the financial pain Elite has already caused Uber, the ride share firm’s management is unlikely to take the threat lightly. Last year the taxi drivers’ association took the global tech giant to the European Court of Justice (ECJ) over its Peer-to-Peer service UberPop, which hooked up nonprofessional, unlicensed drivers with riders. It was a David versus Goliath case, and it was David who came out on top. Not only did the ECJ rule in the taxi firm’s favor but it also declared that Uber was a transportation business, not just a technology platform.

It was a big setback for a firm that spent much of last year mired in corporate scandals and struggling with huge losses. Uber was also recently banned from operating in London after being accused of a string of failures over passenger safety. Undeterred, the firm hopes to win back Transport for London’s approval through a series of talks, while a legal appeal against the ban allows it to keep operating in the UK capital without a licence.

Since the ECJ ruling, the UberPop service has been withdrawn in Spain and several other countries. The ruling will nonetheless force Uber to comply with the bloc’s rules for taxis and other transport companies, meaning the company could face stricter licensing and other requirements.

But ultimately it’s up to each EU Member State to regulate the conditions under which transport services are to be provided, as long as they are “in conformity with the general rules of the treaty on the functioning of the EU.” In Spain the central government, market regulators and legislative branch are largely lined up in Uber’s favor. In April, the Supreme Court could even decide to scrap the current one-license-for-every-30-drivers cap, which would lead to a surge in ride-share services.

That would raise tensions even more. “Everything is really calm now, but the instant Uber sets foot here, it’s going to be a mess,” said Tito Álvarez, spokesman for Elite Taxi. “We cannot control what happens on the streets when their cars start rolling out.” It’s an ominous warning that sounds more like a threat — and one that Uber, in all its worldly hubris, is unlikely to heed. By Don Quijones.

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  1. JTMcPhee

    So, Uber — is it a strike or is it a boycott? I’ve lost track of whether Uber’s suckers workers hopefuls “associates/partners” are “employees” or not. http://www.newsweek.com/uber-drivers-strike-across-us-cities-526247 Maybe some places. The world press seems to jump to “Strike!” maybe because it is such an active-voice clickbaiter. http://www.latimes.com/business/technology/la-fi-tn-uber-drivers-threaten-to-strike-20151016-story.html

    Given that Uber’s business model (“platform”) is just stealing from everyone and ignoring ‘the law” until it can get ‘the law” changed via “lobbying” or what-everrr, the new classic Horatio Alger tale…

    But so many people I know are happy to also USE their fellow mopes (is an Uber driver and his or her vehicle a MOPEd?) to get around, because “convenience,” and of course “price!” Even people who are all kind of liberal and woke and concerned and stuff. So that “to UBER” is now an active voice verb.

    Penetration, my dear boy…

    1. Anon

      In the US, Uber classifies their drivers as independent contractors, but many (including myself) believe they are misclassified under the federal common-law standard (used in federal tax law and the National Labor Relations Act, among others) and the broader (more favorable to workers) Fair Labor Standards Act “economic realities” standard. Uber has successfully used arbitration agreements to make it difficult for workers to challenge their classification directly. Federal regulators aren’t bound by those agreements, but the Department of Labor has been underfunded (and thus, not of much use) for awhile and, as far as I can tell, hasn’t made any public indication of an investigation or enforcement action against Uber. The National Labor Relations Board (NLRB) has been investigating for awhile, but Uber has been playing the usual games to delay things — ignoring NLRB subpoenas, forcing the NLRB to get the subpoenas enforced by a district court (NLRB won), and filing circuit court appeals. Uber’s strategy seems likely to succeed — they’ll probably be able to get a sweet settlement deal from the Republican NLRB GC, just like McDonald’s got today.

      State laws also have their own definitions of “employee,” often multiple definitions for different purposes (e.g. there may be a different definition for state tax purposes versus for state wage and hour laws), and Uber is doubtlessly in violation of many state laws as well. There have been state-level rulings against them on this issue.

    2. oh

      “But so many people I know are happy to also USE their fellow mopes (is an Uber driver and his or her vehicle a MOPEd?) to get around, because “convenience,” and of course “price!” Even people who are all kind of liberal and woke and concerned and stuff.”
      I have seen too many of the “liberal” use excuses like ‘convenience’, ‘immediate service’, ‘less expensive’ for using Uber. These people are helping to increase traffic snarls and global warming and in the long run are helping to dismantle the (meagre) public transportation systems in place. In the end, the Uber boys will sell their company to an even worse outfit (imagine that!) which will raise prices and provide comcast like service and we’ll all suffer.

  2. Jean

    Paraphrasing Freud;

    Sometimes a brick is just a brick. Other times it is a projectile.

    Those bus billboards (in the U.S.) are on public property, therefore anyone can post their own notices or do graffiti, no? Just another way to fight the privatization of public spaces for profit.

  3. Ignacio

    It should be noted that ALSA Coaches, the company that bougth 120 VTC licenses that will allow the return of UBER, was bougth in 2005 by UK’s National Express Group PLC operating in the UK, Germany, Spain, Morocco, Middle East and the US. Another sector undergoing relentless concentration and doing their lobbying job to pursue rent-seeking activities.

    1. Ignacio

      The Government approved new legislation in december regulating VTC licenses. One License allows the operation of 30 ‘taxis’, the owner of the license has to register publicly all the services provided by the taxis, and the licenses cannot be sold in at least two years. Barcelona’s mayoress has promised to expand this regulation in Barcelona forbidding the sale of licenses, and introducing requirements to keep the licenses active.

      Uber and Cabify are again appealing against the government regulation in Spain’s Supreme Court. The only institution that is currently supporting their claims is the CNMC(Natl. Comission for Markets and Competition), the government “independent” agency that supposedly defends the interests of “consumers and companies”. For sure, nobody at the CNMC has read Hubert Horan’s series on Uber and they are ill prepared to do their claimed task because, er.. they do not understand markets!

    2. Eric377

      It should be noted also that Uber has in most markets given taxi customers better pricing most of the time. Highly imperfect maybe, but Uber rent seeking is not why cabbies are upset.

    1. lyman alpha blob

      This woman’s family ought to own Uber after this, and be getting a huge payout from the idiots in whatever govt in AZ allowed these vehicles on the road in the first place.

      Anyone with two brain cells to rub together could see that this was inevitable. It’s unconscionable that this was allowed to happen for the sake of corporate profits, which are likely never to materialize in the first place.

      These ride sharing companies continue to break the law all over the place and no one has enforced it. They should have been shut down years ago. Heads need to roll over this but with this crooked excuse for a government I won’t be holding my breath.

      1. Arizona Slim

        One of my Tucson friends is a personal injury attorney. I’ll bet that he would he LOVE to get his hands on this case. Said friend is very aggressive on behalf of his clients. Very.

      1. JohnnySacks

        The concept of a safety driver is a farce, don’t buy it. The time it takes for a person to gather himself together, assess the situation, and take corrective action is too long. We as a society need to accept the fact that instead of simple human stupid causing accidents, it will be faulty tech, or binary (yes/no, left/right) decisions made by committee designed algorithms.

    2. a different chris

      Boy is Tiffany optimistic. Unless she is a lawyer herself, and thus our version of “soon” is not the same as her version of “soon” (aka halfway until the sun cools).

      As Tiffany Li – (@tiffanycli) notes, who should be liable for this death? Uber? The car manufacturer? The software programmers? Tech lawyers have debated this question for decades. If this goes to trial, we’ll soon have an answer.

      And this is nothing to joke about, but sometimes anger can be expressed by the underclass most safely by a biting comment. I think it sums up all our mindsets, and we aren’t really laughing. Far from it:

      Two questions come to mind – was the women crossing the road on Facebook at the time (Zuckerberg’s fault) and/or was the car hacked by Russia? (Putin’s fault).

      1. Kurtismayfield

        As Tiffany Li – (@tiffanycli) notes, who should be liable for this death? Uber? The car manufacturer? The software programmers? Tech lawyers have debated this question for decades. If this goes to trial, we’ll soon have an answer.

        Isn’t this the point? By putting layers upon layers of doubt at who is at fault they make it so there is no responsibility. I thought that was the main goal of the US corporation to begin with.. getting profit without having responsibility for any negative actions.

  4. Alex Cox

    I don’t know if the same terms and conditions apply in Spain, but in the US if you use the Uber app you agree not to sue the company. Instead you are bound by an arbitration agreement. Arbitration agreements, as we know, always favour the corporation which selects the arbitrator. So if something goes wrong with your Uber ride, in the sense of being robbed or assaulted by the driver, or being injured in a wreck, you are in trouble.

    If you hail or call a regular cab you do not have to sign a contract, and your legal rights remain intact.

    1. JTMcPhee

      When I was in Taiwan in 1968, on R&R (“rest and rehabilitation,” known by us troops as “I&I,” for “intoxication and intercourse,”) the Kuomintang occupation government had just kicked all the human-powered pedicabs and cyclos off the streets, since lots of them were getting killed off by automotive impacts.

      The pedalers rebelled, so the government gave all of them zippy little red Datsuns and Toyotas to maintain their economic viability. Did not provide any driver ed, and the “rules of the road” for cyclos continued to be the custom for these “cabs”, with additions of much greater speeds and nasty little horns blaring, and the most common driver reflex action, after hitting the horn, was to punch the accelerator.

      We Troops were told, in our indoctrination into the culture we were about to penetrate, that in addition to having enough condoms on our persons, we needed to understand that under Chiang Kai-shek’s laws, the PASSENGER was liable for all damage and injuries in any cab-involved smash-up. The ostensible principle was that “but for” the presence of the cab rider, the cab driver and vehicle would not have been in the place of danger…

      The wise sergeant’s advice to us troops, just champing to get at them wimmen and whiskey, was if one was able after a collision, one should get out of the cab and run like he77 and get back on consulate property as quick as possible.

      I expect the Imperial Government is not about to provide “sanctuary” or any other physical or legal protection for people who sign up to Uber’s/Lyft’s adhesion contract of convenience, or for any subsequent “autonomous vehicle rentier’s” version. “But for you, the mope on board, the vehicle would not have been at that location. Eh?”

      Cue the hackers of the hacks, in three, two, one…

  5. paul

    Helluvaway to debug software, its not like they are part of the DOD.

    Collateral innovation,no?

  6. ChristopherJ

    In Cairns Queensland, Uber is all legal and they’ve created new classes of licences for booking operators (like Uber), and those that book through them (Uber drivers and the like).

    There are some good bits as the new regulations which have permitted ride share services to operate do require drivers to get an authority, which involves a drug and alcohol test and police check to assess whether drivers are of good character – a fit and proper person test. All vehicles must undergo an independent and thorough check annually to ensure they are roadworthy, and so on.

    I still take cabs, which are currently limited in number by transport QLD and whose prices are currently capped and regulated (but this is likely to change so as to provide a level playing field, allowing cheaper and surge pricing to be determined by the taxi operators.

    I have definitely noticed a lot more immigrant drivers than there used to be (not visa holders, they need to have perm residency to get a driver authority), but more Indians and men with turbans. So, not as profitable now and anyone with a driver’s authority and a good vehicle have switched to Uber. I know anecdotes aren’t evidence, but I hear that taxi license prices are less than half what they were before Uber, who continues to advertise for new drivers like there’s a real shortage. My Uber mates tell me there are more than 400 Uber operators here, compared to 300 taxis now, so the taxi industry must be hurting as they had the whole market previously.

    It makes sense for Uber to continue to add drivers if there is no limit, even if this continually weakens the take home pay of drivers. Empathy and caring is not their strong suit.

    I’ll just order an Uber seems to be the trendy way to do things. Or let’s call Uber eats ($6.95 for delivery of a meal from any restaurant in the city) is another one.

    Lot of animosity between the cab drivers and Uber. Not sure the world is a better place with them here.

    The Spanish taxi drivers are right to feel threatened.

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