- Regional governments and town councils will regulate ride-hailing (VTC) as urban transport.
- National licences get a four-year transition, after which they will serve only for intercity transport.
- Regions will be able to impose operating conditions, such as pre-booking, routes or hours.
On 25 October 2018 the Congress of Deputies validated Royal Decree-law 13/2018 of 28 September, amending the Land Transport Act on the rental of vehicles with driver, known as VTC. The vote was tight, and the decree will continue to be processed as a bill under the urgent procedure, so its content may still change.
The decree establishes that regional governments and town councils regulate the VTC service when provided as urban transport. It is a rule that matters in Barcelona and other cities, where this summer the conflict between taxis and VTC has been very much in evidence with strikes and protests, and it affects companies such as platforms, licence holders and those who use these services.
What changes for licences
After a four-year transition, state-level VTC licences will only be able to provide intercity services. To provide urban services, it will be necessary to apply for the corresponding authorisation from the region or the town council. National licences do not lose their effectiveness, but they retain it only for intercity transport.
During the transition, urban services provided by holders of national licences will have to meet the conditions set by local authorities on use of public roads, traffic management, environmental protection and prevention of pollution. That transitional period works as compensation for holders, and the period can be extended in duly justified cases.
What regions can require
The decree empowers regional governments to modify the operating conditions of national-level VTC in their territory. They can regulate pre-booking, requests for services, customer solicitation, minimum and maximum routes, mandatory services or hours and the technical specifications of vehicles. These conditions will apply both during the transition and afterwards. This means the legal framework for the same service may differ in Barcelona, Madrid or Valencia, with consequences for companies operating in several cities: more compliance work, but also more flexibility for each territory to adapt the system to its reality.
In addition, the Government has authorised the urgent processing of a draft to reform the law’s penalty regime, linked to a register of communications of VTC services that could start operating at year end, and a permanent working group has been created to facilitate coexistence between taxis and VTC.
What to review
VTC licence holders and companies operating with them should analyse the effect of the four-year period on the value of their licences and on their business models, and follow the rules approved by their region and town council. Financing or leasing agreements linked to those licences should also be reviewed.
Companies that hire chauffeur-driven transport for their employees or customers can review their contracts, insurance cover and service conditions, in case regional or local rules change the pre-booking regime or prices. Each decision should be taken with the final text in view, and with advice.
Urban passenger transport is now regulated closer to the territory, with rules that will vary from one city to another.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
