The competitive advantage rideshare giants have over local taxi firms is their ability to burn cash, as investors eagerly subsidize each ride.
A fresh flash point has broken out between Uber and the highly mobilized taxi drivers of one of its most febrile markets, Barcelona, the capital of Catalonia. A two-day taxi driver strike this week, called to protest against the number of rideshare vehicles on the streets and failure to enforce national regulations that are supposed to limit private hire vehicle numbers, turned ugly on Wednesday as protesters attacked rideshare vehicles.
It’s the latest escalation in a turf war that dates back to 2015, when Uber first arrived in Barcelona. The message from the 2,000 protesting taxi drivers, some of whom had converged on Barcelona from other Spanish cities, was clear: Uber and other app-based rideshare companies such as the Spanish firm Cabify are destroying the taxi industry with impunity. And these taxi drivers will not surrender without a fight.
In Spain the central government and market regulators are largely lined up in the rideshare firms’ favor. The spark for the latest round of protests was a decision by Spain’s Ministry of Public Works to block attempts by Barcelona’s City Council to ensure a previously agreed ratio of 30 taxi licenses for every authorized ride-hailing car is honored. The current ratio in Catalonia stands at 6.7 to 1.
Many Spanish taxi drivers are incensed at how the established national ratio, designed to limit the number of rideshare vehicles, is not being upheld. The rideshare giants have been buying up licenses from other operators to ramp up their presence. There’s also frustration at how rideshare firms are able to operate more cheaply and under less onerous regulations, while also paying little, if anything, in taxes…