National rules imposing a maximum number of taxi licenses are illegitimate if the fundamental justification is to protect the economic viability of the service: that is, the income of taxi drivers and/or the value of their licences. This outcome was decided by the Court of Justice of the European Union (case C‑50/21, Prestige and Limousine SL, decision of June 8, 2023), ruling on an interpretative question raised by a jurisdiction in Barcelona and ruling that the European legislation on freedom of establishment must prevail (art. 49 of the Treaty on the functioning of the EU). The European court also examined whether the quantitative limitations on the number of taxis could be justified for other reasons, for example to achieve the objectives of transport, traffic and public space management, as well as for the protection of the environment, but the final outcome was negative in this case.

The Catalan case concerned local legislation which imposed a maximum number of licenses on NCC transport (rental with driver), equal to one thirtieth of the licenses issued for public taxi transport. The European court admitted the legitimacy of the authorization system itself, however it then denied that the number of licenses could be limited for economic purposes, while saving any objectives of general interest, such as the environment and transport management, which however were not found in the specific case.

The sentence of the European court and the general principles contained therein have an immediate and general value, and prevail over national regulations, including local ones. It follows that many national taxi systems could also be affected, where based on quantitative limits on taxi licenses. As just explained, the issue of the economic viability of the service, in other words the safeguarding of taxi income or the value of licenses created over the years, is not relevant for the European court. Any other objectives in support of such restrictions, such as environmental protection and proper urban traffic management, must be demonstrated in practice, not just declared. In the Spanish case, the European court found that the NCC service was capable of safeguarding these objectives rather than endangering them.

It is therefore likely that the European ruling will also produce effects in various Member States, including my beloved Italy, where the taxi system is often subject to local regulations that restrict the number of licenses that can be issued, with the political objective of safeguarding the economic position of incumbent taxi drivers, and therefore discriminating against those who would like to enter the market. This political objective remains, but could no longer be invoked before a judge, while the other justifications of general interest would be subject to severe scrutiny, which has already failed in the analogous case of Barcelona.

A possible solution could be provided with a system which, while safeguarding the maximum number of licenses, allows the entry of new taxi drivers (and the exit of the incumbent ones) on the basis of objective criteria: for example the use of modern cars, more respectful of the environment or with innovative services, but for the moment these are only hypotheses, because public tenders would be required. Beyond these speculations, we are facing an epochal passage in the age-old dispute between taxi drivers, users, local administrations and, where appropriate, online platforms. The fundamental point of the sentence changes the balance of the discussion, since the economic viability of the taxi service, understood as the achievement or maintenance of a certain income for the taxi driver, as well as the preservation of the value of the licenses, will no longer be relevant to limit the number of taxi licenses.