Taxi licences fall from 220,000 to 70,000 euros in Spain

Taxi licences fall from 220,000 to 70,000 euros in Spain

A man with 80% of the money saved up, no mortgage, all the required licences in order and a family to support is considering buying a taxi licence. His first child is due in April. He can't find anyone to hire him so he can try the trade, so if there's no work, he'll create it. His plan: take out a loan of between 10,000 and 25,000 euros to complete the 100,000 that a licence plus a car costs. The answer he gets is a wall.

The price of a licence has collapsed

In some cities, according to one post in the thread, licences once sold for between 180,000 and 220,000 euros. Today they can be found for 70,000. That collapse, which sounds like an opportunity to a first-time buyer, is the alarm bell that the more seasoned analysts keep repeating: if the asset has plunged 60% in a few years, the market knows something the newcomer doesn't. Whoever paid 150,000 for their licence and now sees offers at less than half that isn't selling a job; they're trying to escape a trap.

The key, they insist, isn't the entry price. It's liberalisation. Spain's Omnibus Law already tried twice to open up the sector. Third time lucky, they say. Brussels and Spain's Competition Authority (CNMC) have long wanted to get their hands on the monopoly. If that happens, the licence is worth zero. A very expensive piece of paper turned into a keepsake.

How much do you actually earn behind the wheel?

The figures circulating don't invite optimism. A taxi driver in Madrid, working 14-hour shifts, doesn't reach 1,000 euros net a month, according to the most pessimistic account. In summer, the city council forces drivers to stop for 15 days, but the self-employed contribution keeps being paid. Fuel, inspections every six months, the taximeter, expenses that pop up every other day. The car's depreciation isn't in that calculation. Neither is an employee's wage, because hiring someone to cover the 24 hours of the day clashes with the regulations.

Another, kinder calculation talks about 1,500 euros net after expenses. The difference, they point out, lies in having bought the licence cheap. Whoever paid 150,000 or more can't write it off with the current level of activity. Whoever bought it for 70,000 has some margin. The business isn't the taxi; it's reselling the licence. And that resale market has dried up.

The sword of Damocles hanging over the taxi trade

The consensus, with nuances, is that the taxi trade is taking on water. In Madrid, eight years ago it was impossible to hail one on a Friday at 2 a.m. Now they cruise past, green lights on, on any busy street. Supply exceeds demand and the customer notices. So do the drivers.

The only viable path mentioned involves having the licence and car paid off, with no mortgage, and using the taxi as a private car when not working. With that, 1,000 euros a month is enough to get by. Not much more. The alternative some suggest —working a few months in someone else's car, renting before buying— runs into a bureaucratic detail: in some regions, a year as an employee is required before you can buy a licence. In others, not. The rules change depending on where you look.

The personal context: a father in April, a family to support

The potential buyer isn't an investor. He's a man who has been out of work for over two years, without benefits for one, with a vocational welding qualification that's no use for emigrating. His parents, his aunt and his grandmother are elderly. His father-in-law has just been laid off. He sees himself as everyone's pillar. The taxi attracts him because he can attend a family emergency and make up those hours later. Flexibility in exchange for endless shifts.

The harshest analyses tell him not to ruin what he has built. With 80,000 euros saved and no mortgage, he can live for ten years managing that money at 8,000 a year. But the money will run out. And so will the boredom. The question nobody answers is what he does with his life while waiting for the storm to pass.

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Taxis were a good business when the business was selling the licence. Those days are over. What's left is a regulated trade, with the shadow of liberalisation hanging over it, entry prices that still seem high and demand that isn't there. The buyer has the money. What he lacks is the piece of information that would change everything.