Auro Founder Triumphs in Five-Year Legal Battle Against Cabify
Félix Ruiz, the founder of Auro, a private hire vehicle company that operates in Malaga, Barcelona, Madrid, and Valencia through Uber, has emerged victorious in a five-year legal battle against ride-hailing competitor, Cabify. Ruiz expressed his relief and satisfaction at the outcome, attributing the victory to perseverance. Auro has not been in operation with Cabify for the past year and a half. It’s important to note that both Auro and Cabify are intermediary firms, bridging the gap between companies with a fleet of vehicles and passengers.
Constitutional Court Ruling in Favor of Auro
The Constitutional Court ruling, which SUR has accessed, acknowledges Auro’s right to choose the platform it collaborates with. Additionally, the court has exempted Auro from the million-dollar claim that Cabify had demanded. The court has ruled that each party will bear its own costs and share the arbitration costs equally.
The History of Auro and Cabify’s Business Relationship
Auro and Cabify’s business relationship kicked off in February 2017 with a dual contract for service provision and vehicle leasing with a driver. This contract was initially for two years, with the option to extend for another two years. On 21 July 2017, the two companies entered into a business agreement and a credit agreement worth 32.9 million euros, which could be extended up to 45.24 million euros. This agreement allowed Cabify to finance the acquisition of licenses by Gestaxi to operate on the Cabify platform. The agreement also included a repayment plan for a loan of four million euros granted to Auro on 16 June 2017. Both contracts were renewed on 10 November 2017.
The Dispute that Led to the Break
The dispute arose from a disagreement over the sharing of percentages. Auro decided to break the agreement and developed its own app to offer its fleet on other platforms. This move infuriated Cabify, which viewed it as a clear violation of the competition clause. Cabify initiated two legal actions against Auro and its subsidiary, Cibeles. Cabify won the first round, but Auro won the second. However, this decision was overturned and has now been reviewed by the Constitutional Court, which has declared the exclusivity clauses null and void.
The Impact of the Ruling
The court ruling also dismissed Cabify’s demand for compensation from Auro, which amounted to over 41 million euros. This ruling is a significant setback for Cabify and a game-changer in an extremely volatile market.
