Cabify returns to Barcelona with a workaround for ride-hailing wait limits
Well that didn’t take long. Despite warning loudly and publicly that incoming changes to private-hire vehicle (VTC) rules in Catalonia would drive it out of Barcelona for good, and force it to fire thousands of drivers, Spanish ride-hailing firm Cabify has announced it’s back operating in the city from today — a month after it left.
#Barcelona, te hemos echado de menos. A partir del 7 de marzo volvemos a recorrer tus calles ? Lo haremos bajo un nuevo modelo de negocio que se adecua a la normativa puesta en marcha por la Generalitat. pic.twitter.com/LAwSZLXlZc
— Cabify España (@cabify_espana) March 6, 2019
The Spanish ride-hailing firm claims to have adapted its business model to comply with regulations, brought in by the local government by decree last month, which impose a waiting time of at least 15 minutes between a booking being made and a passenger being picked up.
The Catalan Generalitat has said it wants to make sure taxis and ride-hailing firms are not competing for the same passengers, and says it’s committed to a full restructuring of the law to ensure the sectors don’t overlap and come into conflict — following a series of taxi strikes, which included scenes of violence.
The new rules also prohibit private-hire companies from displaying the real-time geolocation of vehicles in their apps prior to a booking. Only once a booking has been made can the location be displayed.
The decree also bans VTCs from plying for trade by freely circulating in the streets — requiring they return to a base, such as a parking lot or a garage, to wait for the next booking.
In a tweet confirming its return to Barcelona yesterday, Cabify writes that from today it’s back on the streets of the Catalan capital, having adapted its business model to comply with the new regulations, though it does not specify exactly what changes it has made.
At the time of writing, the ride-hailing firm could not be reached for comment. Cabify also did not respond to our email asking about its adapted model. (Update: The company has confirmed that “just in Barcelona” it is now directly providing a transport service “so we can adapt the service to the law in Barcelona.” Its other operations elsewhere remain unchanged.)
But local press is reporting its workaround for imposed wait limits before passengers can be picked up is to switch its business model for the region from being an intermediate platform to a transport company — working with a VTC firm with a local fleet of 300 cars.
According to El País, Cabify users are required to accept a renewable year-long contract (via new in-app T&Cs), at no additional cost — and then it will apply the wait time only once per customer, offering on-demand rides thereafter, i.e. once the “contract” is in force.
In a follow-up tweet to its users about its return to Barcelona, Cabify warns they need to accept its new T&Cs before being able to resume using the app in the city — highlighting its method for circumventing the wait-time restriction. (The Spanish have a phrase — hecho la ley, hecho la trampa — which does seem rather appropriate here.)
In a statement to El País the company avoided commenting on how it’s flouting the regional government’s decree — but described the adapted business model as “burdensome,” adding that it has assumed “a series of costs” in order to return to Barcelona.
The company is reportedly banking on the Generalitat’s decree being struck down as unconstitutional by Spanish courts. So it’s intending the trick as a stopgap to keep serving the circa one million registered users it says it has in Catalonia.
We’ve reached out to the Generalitat for comment on Cabify’s return to Barcelona.
Elite Taxi BCN, one of the main local taxi associations that has been pushing for regulation of ride-hailing apps, said Cabify’s actions demonstrate, without doubt, that it does not want to run a VTC service — but a taxi service.
Taxis argue their sector is more heavily regulated so ride-hailing companies acting like taxis constitute unfair competition.
The Elite association has also warned it has not ruled out further strike action to protest how Cabify is flouting the regional government’s rules.
Alberto Alvarez de @Elite_TaxiBcn : lo que hace Cabify es un fraude de ley porque los 15 minutos de precontratación son para cada servicio. Confiamos en la Generalitat. Si no se cumple la ley nos movilizaremos. pic.twitter.com/HQlsaOSskO
— Antena3Catalunya (@A3Catalunya) March 7, 2019
Uber also left Barcelona last month ahead of the new rules coming into force — saying the regulation leaves it “no choice but to suspend UberX while we assess our future in Barcelona.”
We’ve asked the company whether it has any plans to relaunch a service in the city.