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Félix Ruiz, founder of Auro, a private hire vehicle company which operates in Malaga, Barcelona, Madrid and Valencia through Uber, has won a five-year legal battle against ride-hailing rivals Cabify. "It was a very difficult lawsuit, but we have won it with perseverance," Ruiz said after the verdict.
Auro has not been operating with Cabify for a year and a half. It should be remembered that these are intermediary firms between companies with a fleet of vehicles and passengers.
In short, what does the Constitutional Court say? The ruling, to which SUR has had access, recognises Auro's capacity to decide which platform it works with. And, furthermore, it is exempt from the million-dollar claim demanded by Cabify. What the parties will pay are their own costs and half of the arbitration costs.
The business relationship between Auro and Cabify began in February 2017 with an initial dual contract for the provision of services and the leasing of vehicles with driver (it was for two years, extendable for a further two years).
Subsequently, on 21 July 2017, the two entities entered into a first business agreement, as well as another credit agreement for an amount of 32.9 million euros, extendable up to 45.24 million euros, whereby Cabify financed the acquisition of licences by Gestaxi that were to operate through the Cabify platform. It also included an agreement to repay a loan granted to Auro on 16 June 2017 for an amount of four million euros. Both contracts were renewed by both companies in contracts signed on 10 November 2017.
One year later, on 5 December 2018, Cabify and Auro signed a refinancing and (non-extinguishing) modification of a credit agreement; as well as a second modifying renewal of the initial collaboration agreement, signed between Cabify, Auro and La Lanzada. It this renewal of the collaboration contract that gave rise to the dispute, due to certain conditions imposed on Auro, which the latter considered restrictive of competition.
The disagreement was over the percentages to be shared. The rope was tightened and Auro broke the agreement and created its own app to be able to offer its fleet on other platforms.
This angered Cabify, which saw a clear breach of the competition clause. It brought two legal actions against both Auro and a subsidiary, Cibeles. Cabify won the first battle and Auro the second, although that decision was reversed and has now been reviewed by the Constitutional Court, which has declared the exclusivity clauses null and void.
The ruling also rejects the compensation demanded by Cabify from Auro of more than 41 million euros. In short, a hard blow for Cabify and a revolution in an extremely volatile market.
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