Uber and one of its drivers targeted by Madrid authorities

Car-sharing service faces fine of €18,000 for operating without a license

Uber CEO Travis Kalanick says the service will be good for Madrid.
Uber CEO Travis Kalanick says the service will be good for Madrid.Chris Ratcliffe / Bloomberg

The Madrid transport department on Monday initiated legal proceedings against car-sharing service Uber and one of the drivers in its network.

Regional authorities are accusing the company, which began serving Madrid on September 23, of operating without a license.

Last Friday was the deadline given to Uber to provide the necessary documents to prove that its activities are legal.

The US-based firm, which has expanded into 45 countries and also operates in Barcelona, faces a possible fine of €18,000 for “offering or mediating” in passenger transport without the necessary license, a department spokesman said.

The driver, who was caught at Barajas airport, faces a €6,000 fine and double that if he is caught a second time.

The driver, who was caught at Barajas airport, faces a €6,000 fine and double that if he is caught again

Taxi drivers in Madrid and Barcelona went on strike in June and July of this year to protest the arrival of Uber and other potential car-sharing services based on smartphone applications that put drivers and passengers quickly in touch with one another.

Although city transport is regulated by national law, inspections and sanctions fall under the power of regional governments. Users of the service will not be targeted, the spokesman added.

“Inspections of unlicensed vehicles will continue to be carried out, whether they operate at the airport, over the phone or through a [smartphone] application,” said the spokesman, whose department has initiated 70 such proceedings against outlaw taxi operators so far this year.

The goal, he added, was to eliminate “unfair competition” and to “guarantee passenger safety.”

“Uber’s activity can be legalized if it operates with licensed vehicles,” he added.

Last Friday, representatives of the transport department met with taxi driver associations to discuss the issue, and the regional government has also requested a meeting with the Public Works Ministry to try to find “a global solution.”

“Taxi drivers who join Uber make $10,000 more a year”

Pablo Guimón

EL PAÍS recently interviewed Uber co-founder Travis Kalanick in London, where he offered his views on what it will do for Spain's transport services. The following is an excerpt from the interview.

Question. What would you tell taxi drivers in Madrid?

Answer. What we've seen in every city is that the market for transporting people from place to place has enormous growth potential. We have also seen a good number of taxi drivers join Uber and make a much better living. Taxi drivers who join us make an average $10,000 more a year. This is because Uber sends them customers during their slow hours. What I would tell Madrid taxi drivers is to view Uber as a great opportunity rather than a threat. We help drivers earn a better living.

Q. The problem is figuring out where the collaborative economy ends and the informal economy begins. Should your drivers pay taxes on what they earn?

A. Everybody has to pay taxes. The traditional transport system is mostly based on cash payments, and often very few taxes are paid on it. Uber is completely digital, and everything leaves a trail. Drivers have no choice but to pay taxes. What Uber does is turn a cash-oriented industry into a digital payment industry that becomes easier to control.

Q. Technology is changing all the industries. Has the time come for urban transport?

A. It's inevitable, because this specific type of technology is improving the cities. Uber creates jobs, makes mobility easier, reduces parking pressure, takes cars off the streets. It's simply good!