Regional and local governments in Spain will be able to annul thousands of private-hire driving licenses, a move that has been hailed by the country’s established taxi companies who have seen their business drop due to the more cost-effective an reasonably priced services that Uber and Cabify drivers offer through mobile phone apps.

At present, Spain’s private hire national licenses expire following a four-year transition period during which the country’s taxi drivers and their Uber and Cabify rivals work under parallel licensing regimes.

The country’s 150,000 registered taxi drivers, however, have grown increasingly angered by the amount of competition they face from the 15,000 Uber drivers that have registered in the country. The taxi drivers claim that they are at a disadvantage against private hire operations as the latter do not have the same overall tax burden as regular taxis.

The new law, however, could pave the way for the elimination of private hire services in some Spanish cities. The country’s regional and municipal administrations will now be allowed to set their own limits for the number private hire licenses that are granted or eliminated.  The will also be given the authority to eliminate the competitive advantage of private-hire service providers by introducing new taxes and regulations.

Since 2017, the Spanish government has set a ceiling on the number of licensed private hire companies can issue. That ceiling raised the informal value of these licenses, which will now lose their value. Private hire licenses are cheaper than official taxi licenses which can cost up to €200,000 in certain cities.

The private-hire industry is expected to challenge the new Spanish law in European courts.

Uber launched its services in Europe in 2011 but angered local professional taxi drivers and the lucrative service rackets connected to them, saying Uber and other similar services did not operate under the same rules for insurance, licensing, and safety.

Bowing to pressure from a powerful combination of lobbyists and the local taxi mafia, Athens forced Uber to suspend its operations in Greece despite having over 450,000 registered users and drivers in the country in 2017.