Unions representing the more than 70,000 official taxi drivers in Madrid have called the industrial stoppage for 24 hours beginning at 6am on Wednesday.
Only minimal services will be provided outside hospitals and transport hubs for emergency situations and those with mobility difficulties, a joint statement by taxi unions said.
A huge demonstration will be staged in the centre of Madrid with an estimated 20,000 drivers expected to attend.
Taxi driver federations have long been complaining of the unfair competition posed by car-pool services such as Cabify and Uber which, they say, are not subject to the same strict regulations as official taxi drivers.
A recent ruling by Spain's Supreme Court that allowed the granting of 80 new VTC licenses for Uber and Cabify drivers stoked the flames of the dispute.
While new regulations have been imposed requiring drivers to register and use a blue number plate to identify their service, traditional taxi unions fear the ruling will pave the way for the application of tens of thousands of new permits.
“They can work with an authorization that costs €36 while for a traditional taxi driver it's more like €150,000,” said a representative from the Fedetaxi union.