Uber faces unfair competition probe over Madrid airport service pricing screen shot 2017 07 24 at 11 54 37 am

An airport transfer service which Uber offers in the Spanish capital Madrid has been referred by the city council to the country’s national antitrust watchdog, the CNMC, for review, Reuters reports.

Madrid council is concerned Uber’s pricing for the airport transfer does not cover the costs of running the service and thus could constitute unfair competition.

Uber charges from €15 to €29 for the transfer from Madrid’s Barajas international airport and the city centre, depending on the vehicle used. Standard taxi fares for the same trip are fixed at €30.

Uber also offers a discount of 50 per cent on travel to or from the main train and bus stations.

In a statement on its action, Madrid city council said Uber’s airport transfer service “may violate certain articles of the Unfair Competition Law and consumer rights, if it is below the costs of realization Of services and its sole purpose is the recruitment of travelers through practices of unfair competition”, and the council has therefore sent a “request for analysis” to the CNMC.

At the time of writing neither Uber nor the CNMC had responded to a request for comment.

Uber re-entered the Spanish market in 2016 in a limited capacity, offering a version of its service that uses only licensed drivers, and only in Madrid. Legal challenges by taxi associations had led to an earlier ban on its full service in the country.

In May this year, taxi drivers from three Spanish cities staged a protest in the capital against Uber and another local ride-hailing startup, Cabify — with taxi drivers angry that private hire vehicles do not face the same regulatory burdens.

There is also anger that a supposed a ratio in Spanish law of one private hire vehicle license per 30 taxis is not being maintained. Indeed, the CNMC itself encouraged a relaxing of licensing rules.

Reuters cites figures from the Ministry of Public Works for Madrid, the only Spanish city where Uber is currently active, which indicates there are more than 2,000 licensed private hire vehicle taxis in the city vs about 15,000 traditional taxis. So far more than the 1:30 legal ratio.

Uber has been actively lobbying for a relaxation of the private hire vehicle cap, and appears to be playing a longer game of maintaining a partial service in Spain as it waits for the hoped for regulatory ‘liberalization’ down the road.

On private hire vehicle licenses, the city council says it maintains close contact with the taxi sector regarding the “controversy over the increase of licenses”.

It adds that the inspection of private hire vehicles has also intensified, “through a collaboration agreement between the City and the Community to train municipal police in this regard”.