According to Advocate General’s conclusions on Case C-50/21, the limitation of the number of hire vehicles licences in the Metropolitan Area of Barcelona violates freedom of establishment.

Both taxis and private hire vehicles (PHVs) carry out local private transport services and, in Spain, in the recent years, PHVs have found their way into intra-urban transport, in addition to the inter-urban transport activity they already performed. As a result, the traditional taxi model, protected from competition thanks to the State intervention, is being questioned, as more and more suppliers of PHV services appear.

In the Metropolitan Area of Barcelona (AMB), to be able to provide PHV services, specific licences are required, which are limited to one licence for every thirty taxi licences, which has limited several times the access of new competitors to the market, under the Regulation governing non-scheduled urban transport services provided by private hire passenger vehicles with up to nine seats operating solely within the Metropolitan Area of Barcelona.

The case being discussed

Prestige and Limousine, S.L. (P&L) is a holder of licences to operate PHV services within the AMB which has challenged before the Catalonia High Court of Justice a local regulation that tries to organize and order PHV services in the whole AMB, requesting its anullation. It is important to say, though, that there are fourteen other companies which were providing PHV services in the area that already challenged this regulation, saying that the limitations and restrictions imposed by this norm were obstructing their activity and protecting the interests of the taxi sector.

The national court doubts about the compatibility with European Union law of both the limit imposed on the number of PHV licences as well as the “dual licence” regime PHVs have been subject to in AMB, which could be seen as a strategy aimed to decrease the competence from PHV services with respect to taxis, and seeks a preliminary ruling from the Court of Justice of the EU.

Therefore, the Court of Justice must decide whether the local regulation meets the requirements of the freedom of establishment under the article 49 of the Treaty of Functioning, which applies to the services in the transport field.

The conclusions of the Advocate General

The Advocate General, in his conclusions, considers that even though local passenger transport on-demand services are not currently subjects to harmonization in the European Union, freedom of establishment must be respected, which is not the case taking into consideration the restrictions that the requirement of authorization, as well as the ratio 1/30 constitute.

The freedom of establishment can be limited, but only if it serves to an overriding reason relating to the public interest. The Advocate General examines the reasons given to justify that this interest is present.

The Advocate General does not consider that the economic viability of taxi services constitute an overriding reason relating to the public interest: he says that even though it’s true that private local transport can compensate the lack of services which are not covered by the public local transport, the expansion of the offer of local transport services would help build a system which worked correctly. The Advocate General explains that there is no reason why PHV should not be included in this offer, and that taxi services cannot be protected only because they can constitute a service of general economic interest.

The Advocate General, holding a similar argumentation, believes that the maintenance of an equilibrium between taxis and PHV cannot either be considered an overriding reason relating to public interest, because if the true intention is to create an adequate system of private local transport, the expansion of the offer through the admission of more PHV would be more useful to solve the problem.

On the other hand, the Advocate General does not see a problem in justifying the demand of an additional authorization, because it can fulfil the region’s specificities regarding traffic and contamination, but this additional authorization must not require to duplicate the already performed controls.

Regarding the 1/30 ratio, the Advocate General is unable to see any argument which favours the existence of this reason to materialize the overriding reason relating to public interest. He does not understand why taxi services and PHV services are subject to a different set of rules if they are satisfying the same demand, which is the private local transport and, especially, if they are competing between them. He believes that it makes no sense that the PHV are being restricted from accessing the market while taxis licences have remained unaltered for years.

These are, however, the conclusions of the Advocate General, which is an independent that proposes a legal solution to the case. Therefore, they do not bind the Court of Justice, but it is usually the line of reasoning that judges use to find a solution to the questions posed.

Conclusiones Abogado General Asunto C-50_21