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INSIGHTS / THE BIG PICTURE

Spain's gig and sharing economy startups flourish, despite barrage of restrictions

Spain · Apr 22, 2019 · By Gareth Gardiner Jones

Startups like Glovo and Spotahome topped fundings raised in 2018 despite local regulatory risks, as Spanish tech firms conquer overseas markets

Startups in Spain’s sharing and gig economies have been increasingly embroiled in regulatory tugs-of-war. This has so far culminated in a new law in Barcelona this February, aimed to severely cap the operations of on-demand ride-hailing services in the second-largest Spanish city. A month later another new law, this time in the capital of Madrid, has targeted the booming holiday rentals sector.

After protracted demonstrations by licensed taxi drivers demanding curbs on ride-hailing services, locally known as VTCs, Barcelona authorities have ensured that these on-demand transport apps are now only able to accept customers who have booked at least 15 minutes in advance. In response, the two principal providers, Uber and Spain's Cabify, withdrew their services in the Catalan capital. 

"The obligation to wait 15 minutes to travel by VTC doesn't exist anywhere in Europe and is totally incompatible with the immediacy of services upon demand, like UberX,” Uber said in a statement. Cabify, with 1 million registered users in Barcelona, said the new regulation's “only objective is the direct expulsion of Cabify and its collaborators from Catalonia and Barcelona."

Meanwhile, gig economy startups like Glovo and OnTruck are facing increased scrutiny and action over the casual employment status of gigsters, who several courts have ruled should be treated as salaried workers.

Yet, despite these prevailing regulatory challenges, gig and sharing economies startups – including Glovo, Cabify, Spotahome and OnTruck – were among the best-funded Spanish startups in 2018. 

Edited by Bernice Tang and Suzanne Soh

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