licenses of 500 euros that are resold to 135,000
The price of a taxi license in the market is around 135,000 euros in Madrid, but that is not the real cost, at least in administrative terms. The resale of licenses, both to operate with a taxi and to do it with an Uber or Cabify, is governed by the law of supply and demand, so that its market value is far from the initial investment needed at the time of the concession. There are two ways to get a license legally: by concession or by transmission. However, in Madrid has not been granted any taxi license since 1980, when 110 permits were given, because "has not detected the need for more licenses to meet the demands of citizens," as explained by City Council sources to this newspaper.
Although almost 40 years have passed since the last taxi license was granted in Madrid, the consistory has perfectly defined in its tax ordinances how much a new license would cost, if it decided to take a new batch: 491.30 euros per taxi. Thus, those 135,000 euros to which the licenses are resold on average, suppose to multiply by 275 times the administrative cost fixed by the City Council. 27,000% more. In addition, although the City Council does not have the licensing prices of the licenses of 1980 and previous years, they assure that "it is even possible that some were granted free of charge".
The administrative fee has hardly changed in the last ten years. The oldest data provided by Madrid is from 2009, when the cost was 481.70 euros. On the other hand, the amount that the administration receives for these resales is also much lower than the value of the operation. The authorization for the transmission of taxi licenses costs 584.75 euros, according to the Fiscal Ordinances and Municipal Public Prices of 2019.
Although the 135,000 euros it costs on average one of these licenses can be a high investment, the 15,576 taxis that operate in the Community of Madrid have a buyer: their own competition. This same week, during the war of the taxi against the VTC, Cabify's proposal to placate the protests of the taxi drivers was known: a "transition fund" to compensate the union with 150,000 euros per license. The proposal proposes that VTC companies that would like to participate contribute to the fund five cents for each kilometer traveled by their cars. In this way, they would raise between 400 and 1,000 million euros, "with what in a short time the value of all the licenses would be added", estimated at 2,400 million euros, according to the calculations of Cabify.
Speculation in the VTC sector is not far behind either. Although it is not possible to grant new licenses due to the "unbalanced situation" between the number of VTCs and taxis, the administrative procedure to register the transport authorization for an Uber or a Cabify would cost a little more than 38 euros. This low price at which they were acquired makes the transfer of these licenses a very profitable operation, since their market value is around 40,000 euros. Two years ago, before the boom of these applications, the price was about 10,000 euros. However, this cost could fall again due to the restrictions imposed by the Government on the sector, which will demand millions in compensation.