Barcelona is ready to unleash the taxman on delivery platforms like Amazon.
In the wake of the COVID-19 delivery boom, city councils have scrambled to respond to traffic congestion and air pollution ensuing from a pandemic-era glut of delivery vans on its streets. Barcelona’s first step: a yearly tax on transport companies fulfilling home deliveries, forcing the biggest e-commerce players operating in the city — including e-commerce giant Amazon — to cough up hundreds of thousands of euros annually for using public spaces when delivering packages and in turn nudging consumers to venture out to collect their own parcels.
The plan, if approved, would see e-commerce logistics companies with a turnover of more than €1 million annually pay an income-based tax of 1.25 percent. The money collected will be used to support local brick-and-mortar stores, though it’s unclear what form that might eventually take.
The city council struck a deal on the proposal in December, and it was approved at a technical level this week. The final green light, by the full city council, is expected next week. The proposal is expected to be applied from March on.
The tax is intended to “encourage a change of habits toward a sustainable model,” Deputy Mayor Jaume Collboni wrote in an opinion piece in December. Another goal is to level the playing field between brick-and-mortar shops — which often pay city taxes — and e-commerce players — which don’t when they’re based outside the city— given that consumers could bear the brunt of webshops’ higher operating costs.
“[E-commerce] makes really intense use of the public space,” said Jordi Castellana, a city councilor from the Catalan Republican Left, an opposition party that supports the proposal. “The delivery at home [means] that there are many vans and other vehicles,” adding that on top of that a lot of those deliveries are “failed deliveries.”
The tax’s scope includes e-commerce package deliveries but not deliveries to businesses, pickup points, shops or storage facilities.
Getting creative
Such a tax plan necessitated some creative thinking.
While vans mainly occupy streets, “Spanish legislation doesn’t allow the local administration to regulate traffic taxes,” Castellana explained. “It’s very hard to regulate how the delivery must be done. We found that one possibility was to regulate [a] kind of parking tax for these kinds of deliveries.”
Economists at the University of Barcelona calculated that e-commerce deliveries accounted for €2.6 million in parking costs every year, based on regular parking prices and an estimated occupancy time. The total tax to be collected annually is as such capped at that level for now — it’s not about the money, but about triggering a behavioral change, Castellana said.
It remains to be seen, though, whether a tax is the best means of getting a handle on home deliveries and encouraging people to pick up their own parcels. The initial reflex to limit delivery traffic is correct, said Heleen Buldeo Rai, a senior researcher in e-commerce, urban logistics and sustainability at the Vrije Universiteit Brussel: “We know that, especially in cities, pickup points have a much bigger sustainability advantage than home deliveries.”
But the key may be overcoming a knowledge gap, not imposing blunt-force taxation.
“People are actually not wary of [pickup]; they are prepared to use pickup points, especially in the city. But the option is not always available, that’s on the side of the webshops, and the advantages, especially for the environment, are not clear to people,” Buldeo Rai said. Creating awareness for both webshops and consumers — as cities like London and Brussels have done — is much more effective than imposing a tax, she said.
It’s unclear why the tax targets logistics companies rather than e-commerce shops themselves (though a company like Amazon is both).
While e-commerce delivery vans have become more visible since the pandemic, they make up a fairly small percentage of overall freight transport — only 5 percent, Buldeo Rai estimated, in countries like Belgium and the Netherlands, and at most 10 to 20 percent in some U.S. cities. Numbers for Spain were not immediately available.
One of Spain’s logistics trade groups, UNO Logistica (of which Amazon is a member), has already lashed out against Barcelona’s proposal, calling it a “discriminatory tax” and warning that businesses will have to “assume higher costs or pass them on to their customers.”
Amazon itself declined to comment ahead of the vote. The e-commerce giant often likes to point out it’s already cutting down on emissions in its last-mile delivery by using other transportation means, like electric vans; 6 million Amazon packages were delivered by emission-free transportation in Spain in 2021. In Barcelona, Amazon has about 1,000 pickup points to limit home deliveries.
Despite experts’ doubts and companies’ protests, other cities are taking notice.
In an interview last month, David Belliard, Paris’ deputy mayor in charge of transport, criticized Amazon and other e-commerce companies “for making billions by using public space.” He also suggested imposing a tax, which could help fund public transport.
“In Ile de France [the broader region around Paris], a million packages are delivered a day. An eco-contribution of 50 cents per package, that makes €180 million collected for the funding of our transport,” Belliard said, illustrating that Barcelona’s proposal may not be alone for long.