Comment by m0skit0 | Hacker News Reader

Comment by m0skit0 | Hacker News Reader

I live in Madrid and this issue is fairly complex.

- Taxi is a public service that is performed by private entrepreneurs. As such, it is strongly regulated by law (fares, working days/hours, etc...). On the other hand, VTCs (spanish acronym for Transport Vehicle with Driver, Vehículo de Transporte con Conductor) are not regulated by any special laws (except labour laws of course).

- Taxi drivers were always strongly organized but more of a guild kind of organization rather than a union kind. Most VTC drivers are not organized in any way.

- The price of a taxi license is quite expensive (150,000+€ in Madrid), however a VTC license (private transport license) is way cheaper.

- Most taxi licenses are owned by individuals, not companies. There are very few people that have more than one taxi license. On the other hand, most VTC licenses are concentrated in very few hands (mainly Uber and Cabify).

- The agreements between taxi drivers and government was that he ratio between VTC licenses and taxi licenses is to be 1:30. Currently it is 1:5, hence the strikes.

* How much is "way cheaper"? I've heard that VTC licenses are getting more and more expensive, around ~50K € (if I remember correctly).

* What do you mean by "concentrated in very few hands (mainly Uber and Cabify)"? Surely Uber and Cabify don't directly own those licenses, right?

The reason VTC licenses are expensive is that it were first illegal, then EU forced legality with a directive, then government found a loophole to forbid them again, so there was a window of a few years when they could be obtained.

So artificial scarcity.

Edit: Oh and BTW it was taxi drivers who mostly benefited by the price boom. They bought the licenses for less than 200 and sold them by thousands.

* You can find VTC licenses for ~60,000€.

* Uber and Cabify don't own those licenses directly but their CEOs and investors do (https://www.elmundo.es/cronica/2018/08/05/5b659a44468aeb9a29...).

> - The price of a taxi license is quite expensive (150,000+€ in Madrid), however a VTC license (private transport license) is way cheaper.

Am I reading this right? 150,000 euros for the privilege of driving a taxi?

Yes and no.

AFAIK, licences are limited and no way near that price. When a taxi driver retires, he "resells" the license to another colleague for a huge amount (150k+). The buyer buys it knowing he'll be able to resell the license when he retires too, and so on.

This practice has been going on for years, so now taxi drivers are afraid of losing the status quo because they've paid an overpriced license.

Yes. Government does not issue more taxi licenses, so the only way to get one is to buy it from someone else. The price is set by the market. A taxi driver can easily make 2,500€/month in Madrid, especially if he/she hires another driver/s to drive the taxi when the main driver is resting.

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