While Europe is arguing over the employment status of drivers and delivery workers employed in the platform economy sector, Colombia faces an entirely different type of problem.
After having operated in the country for six years in a legal gray area, Uber was forced out of the Colombian market against the backdrop of repeated resistance from the taxi companies and drivers. As of 2020, Uber had 2.3 million users around the country.
Because of Uber’s popularity, Colombian taxi drivers, who have to pay extremely high fees for acquiring operating licenses, felt they were put at a disadvantage. They filed a lawsuit targeting Uber. According to an attorney leading the case, other ride-hailing apps present on the market, such as Didi, Beat, Cabify were to be sued next. Scapegoating Uber for its success doesn’t help anyone–but, above all, it hurts consumers.
The court decided that Uber had indeed violated competition rules and was ordered to cease its operations across the country.
Sharing economy platforms are innovative and adaptable – their entrepreneurial spirit is outstanding. Uber found a loophole in the court’s ruling that quickly helped them get back in the market. Renting cars is entirely legal, and Uber came up with a new business model that allowed users to rent a vehicle with a driver. The court decision was soon overturned, but Uber remains illegal. Its drivers ask passengers to take the front seat to avoid unwanted attention from the police, which could result in fines and/or having their vehicles confiscated.
The availability of ride-hailing apps such as Uber on the Colombian market provides an alternative to traditional taxis. However, both are equally important. Both services have their target audience. Governments should not intervene by banning or creating unfavourable conditions, so drivers fear getting stopped by police and receiving significant fines. Consumers should choose to use their smartphones to arrange a ride or hail a taxi in the street.
Uber solves many problems in the Colombian market which are concerning to consumers. First, it’s safety. In Colombia, taxis have a reputation of generally being unsafe. In 2018, for example, “15% of robberies were perpetrated when the victim was using a transportation service“. Uber and its main competitor in Colombia, Didi, offering additional security features, provide an innovative solution to this problem.
A dedicated safety support team allows you to get help or report an incident and provides a great overall customer support system. During the ride, the app enables you to share your ride details with trusted people, which adds more to the feeling of security.
Second, Uber is transparent. When you use Uber, you are aware of the approximate charge before even ordering the ride, and if you have any doubts, the history of each ride is recorded and easily accessible. On the other hand, you don’t have the same transparency when using taxi services. Drivers could take a longer route, pretend not to have any change or round up the fee and ask for more than the meter is showing for the sole reason that “it’s Sunday” like it happened to me on one occasion in Colombia.
The availability of Uber and other sharing economy services is an important part of Colombia’s attractiveness as a digital nomad hub. Location-independent remote workers who use technology to perform their job rely on sharing economy platforms for their accommodation and transportation needs. As an internationally trusted company, Uber is the preferred mode of transportation because of the aforementioned reasons. Dealing with taxis could be much more complicated for people who don’t speak the local language, but with Uber, you drive with certainty and security. Even if Uber can be more expensive during the rush hours, paying a little extra is worth it for other digital nomads based in Colombia and me.
Consumers’ lives have changed with the emergence of ride-hailing. Banning a preferred service by millions of consumers in the country sets a wrong precedent and puts the future of already established or currently emerging innovative services in jeopardy. Colombia should embrace innovation, encourage the entrepreneurial spirit and facilitate entry barriers for more sharing economy services.