The Supreme Court has unblocked the processing of 200 VTC vehicle licenses in Gran Canaria by considering that the restrictions set since 2014 by the Canary Islands legislation on this matter are not applicable, as they contradict European rules on freedom of establishment.
The Superior Court of Justice of the Canary Islands (TSJC) had already ruled in a similar vein, but the Cabildo of Gran Canaria and the Regional Federation of Taxis of the Canary Islands asked the Supreme Court to correct its criteria, in application of the right of the outermost regions (ORs) to have special treatment within the EU.
The Supreme Court is now reviewing the TSJC's ruling, but concludes that there is nothing in the regulation relating to ORs in the EU Treaties that justifies making an exception to European rules on freedom of establishment, such as the one requested by Gran Canaria.
This litigation rests on the restriction that the Government of the Canary Islands introduced in 2014 through the fiscal and administrative measures law of that year to the Road Transport Law approved by the regional parliament seven years earlier, in 2007.
Specifically, a limit of one VTC license for every 30 taxis was established, a threshold from which the cabildos can refuse to grant more permits like those needed by companies such as Uber or Cabify, which have not yet managed to establish themselves in the archipelago.
In summary, the Cabildo of Gran Canaria argued that it could not refuse to apply what is literally set out in a regional law in force, even though there are rulings from the Court of Justice of the European Union that have already ruled against these types of restrictions on freedom of establishment.
However, the Supreme Court replies that this freedom of establishment has the status of directly applicable European law in all member states and can render national or regional laws that contradict it void.
The Contentious-Administrative Chamber of the Supreme Court specifies that EU jurisprudence is not closed to recognizing some specific restriction on this freedom, but it always requires that such an exception be justified for reasons protected by European law.
"That the 1/30 ratio is established in a law and general interest purposes are invoked in its defense does not exempt from proving its adequacy and necessity," explains the High Court.
And, in its opinion, in this litigation over Gran Canaria's VTCs, "the reasons and data examined do not prove that this ratio meets the requirements of adequacy and necessity established by the Court (of Justice of the European Union)".
The Cabildo of Gran Canaria argued that its decision was not only based on reasons of "economic viability of taxis," such as those that underpinned other regulations already overturned by European justice (like the restrictions on VTCs in Barcelona), but also on "general interest related to environmental protection, the capacity of island roads, and the limitation of vehicle fleet growth."
The Supreme Court does not accept this. For its magistrates, these purposes invoked by the Cabildo to oppose more VTCs circulating on the island can be achieved with other less restrictive measures on freedom of establishment, such as prohibiting circulation in certain areas and at certain times or setting emission limits.
"The allegations made do not explain why these alternatives would be insufficient to address the circumstances of the Canary Islands nor, therefore, why it is necessary to prevent new authorizations solely because the 1/30 ratio has been exceeded," assures the rapporteur judge, Margarita Beladíez.
The Supreme Court cannot declare a law, in this case a regional one, null and void; that step can only be taken by the Constitutional Court. However, it rules that in this case it is appropriate to apply European jurisprudence and declare this restriction in the Canary Islands legislation inapplicable, without the need to submit a new consultation to the Court of Justice of the EU on something that it has already resolved.
With this appeal dismissed, the TSJC's 2024 ruling is activated, which obliges the Cabildo of Gran Canaria to process the authorization of the 200 VTC licenses demanded by a company in the sector.
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