The clash between Colombia’s traditional yellow cabbies and newcomer services like Uber reached a tipping point Monday.
President Juan Manuel Santos announced new regulations creating a new nationwide “luxury transport” classification and establishing rules by which Uber and similar services can operate.
“This decree has already been in the process of development for various weeks,” said vice president German Vargas Lleras alongside President Juan Manuel Santos on Monday. “We will enter a period of transition with which we hope everyone will comply.”
Essentially, Uber has to follow the same requirements as traditional taxis.
Uber has refused to meet similar demands in municipalities and countries around the world, pointing out that it is not a taxi service and therefore should not have to meet the same requirements as taxis.
Representatives of the company struck a more hopeful tone on Monday, however.
“The regulation of luxury taxis is a firm step to offer a new option for those who want a premium service,” said a representative of Uber Colombia during the announcement. “We are optimistic about the provision of new services that will meet the needs of Colombians.”
Uber’s representative also said that the company would work with Colombia’s Congress on future transportation laws. The new regulations won’t go into effect for six months, according to a statement Uber released Monday.
Meanwhile, traditional taxis will be free to provide a new kind of service that might be more competitive with Uber.
Luxury taxis will meet certain requirements for comfort, quality, security and customer service, according to Transportation Minister Natalia Abello.
The new taxis will be high quality cars and must meet strict standards for comfort and passenger space. Drivers must meet licensing requirements, complete courses in customer service and charge a legal minimum fee higher than traditional taxis.
Passengers must also be able to pay fees with credit and debit cards, another factor that could help luxury taxis compete with Uber, which exclusively accepts electronic payment.
“We give our vote of confidence to the regulations,” said a representative of various Colombian taxi guilds and associations during the Monday announcement. “At the same time, we would like to ask the government to continue to improve the working conditions for all taxi drivers.”
The laws could also impact Lyft and Mi Aguila, which provide services similar to Uber.
“With this, a road will be opened … that we hope will make everyone happy,” concluded President Santos. “We also hope that passengers — because passengers must be a priority — will have the best options.”
Colombia is hardly the first country where Uber has stirred up controversy.
Not Uber’s first roadblock
The ride share service is restricted or banned in Germany, Spain, the Netherlands, Thailand and South Korea, among other countries. It’s also illegal in at least a dozen major cities including Cape Town, Brussels and Mumbai.
That hasn’t stopped Uber — which was valued at more than $50 billion USD in July — from waging legal battles against nations and municipalities that try to restrict it through regulation.
Uber operates in 60 countries and hundreds of world cities, including Bogotá, Barranquilla, Medellín and Cali. Some 20,000 Colombians drive for Uber, according to this company’s press release.
The company asserts it is not a taxi service, but rather a “for-pay ride sharing” tool that facilitates a transaction between two private parties. Car owners can maximize the value of their vehicles and customers can get a ride at a competitive price.
But taxi unions angered by what they consider unfair competition have found that argument dubious.
In Bogotá, disputes between taxi drivers and Uber drivers occasionally turned heated last spring, and there were several reports of threats of violence. Colombia’s national Association of Taxi Drivers and Owners condemned violence by “radical groups of taxi drivers” but has otherwise applied tremendous pressure to regulate ride-share services.
Nonetheless, Uber’s financial clout makes them a formidable opponent for governments and regulatory bodies. Their $50 billion valuation is worth as much as half of the entire global taxi industry, according to an estimate by statisticians at FiveThirtyEight.
In the past, Uber has explicitly told its drivers to ignore some regulations, offering instead to pay for any fines or legal fees the drivers might incur as a result.
It’s too early to tell if Uber will take that route in Colombia, but given the company’s tenacity in fighting restrictions in other countries, it’s unlikely that the law announced Monday will be the last battle over Uber in Colombia.