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Uber versus Bogotá’s Taxi Lords

By: Daniel Raisbeck - @DanielRaisbeck - Jul 18, 2014, 11:10 am
Uber in Bogotá, Colombia
(PanAm Post)

EspañolThere’s more bumbling in Bogotá about Uber. Contrary to the minister of transport’s announcement on June 17, when the official line was that the company operated illegally, the vice minister stated on Tuesday that the government was considering a decree to allow Uber to run in Colombia under a service license with a special category.

Predictably, the capital’s taxi coterie have responded by raising a war cry in their struggle to protect their undeserved privileges. Hugo Ospina, leader of Bogotá’s cab gild, has threatened the government with a city-wide strike, including the obstruction of roads — presumably main thoroughfares — if Uber is permitted to carry on its activity in the country.

And the threat should be taken seriously. On August 2, 2001, after then-Mayor Antanas Mockus announced that the restrictions to private automobiles (the senseless, statist measure known as Pico y Placa) was to apply to cabs and buses as well, taxi drivers sallied en masse and blocked at least 40 of the city’s main streets and avenues.

As El Tiempo reported, the result was “one of the most chaotic days in Bogotá’s recent history,” with school children forced to sleep in school buses or in classrooms. That is quite a statement in a city where transit chaos is the daily norm.

The next day, thousands of people were again unable to reach work or school when taxis and buses simply refused to operate. Bluntly stated, the cab drivers’ closed shop — although they eventually submitted to Mockus’s measure — proved they could paralyze the city. That is precisely what they intend to do in the coming weeks in order to coerce the government to send Uber packing.

Uber logo
(Facebook)

To be fair to the taxi drivers, their anger is justified insofar as President Juan Manuel Santos, in one of his “man of the people” moments right before his recent reelection, promised thousands of cabbies that he would cancel “applications that foment illegality” in public transport. That meant Uber, provided of course that the cabbies would vote for him. Now, after they helped Santos keep the presidency, it turns out that he has other plans.

Then again, taxi drivers, who are seldom naïve, should have known that Santos is about as loyal and true to his word as Ephialtes of Trachis. Personally, I wouldn’t buy a used car from the fellow under any circumstances, which is why I also didn’t buy his pledge that voting for him meant choosing peace, puppies, and baby seals handed out to each of your smiling kids on the doorstep.

The Santos campaign promise to cab drivers, whether he keeps it or not, simply attests the might of the taxi industry barons. As La Silla Vacía explains, two former taxi drivers, Uldarico Peña and José Eduardo Hernández, own 25,000 yellow cabs operating in Bogotá, each of which is run by at least two different drivers. This means that they lord it feudally over at least 50,000 families, whose members are potentially capable of depositing a few hundred thousand votes in any election.

In LSV’s words, Monsieurs Uldarico and Hernández “can decide who is elected mayor [it is rumored that they have financed the campaigns of the last six mayors] and, if they turn on [a mayor], they have very persuasive negotiation methods.” For instance, chaos-inducing strikes and roadblocks.

It’s clear, in other words, that despite their rags-to-riches rise, Uldarico and company are no friends of laissez-faire of any sort. In fact, they have followed a traditional path toward economic success in Colombia, owing their prominence to their political influence and, especially, to the fact that the state can charge more than US$50,000 (over 100 million Colombian pesos) for a taxi license (cupo). This obviously increases artificially the price of even the shabbiest yellow cab in an astronomic fashion, which means that most drivers can’t afford to buy their own taxi; rather, they must work for state-sponsored, strong-arming monopolists like Uldarico.

So cab drivers’ complaints would be legitimate in terms of fairness of competition if they asked, for instance, for taxi licenses to be reduced drastically or completely eliminated. Instead, they threaten to resort to thuggish practices such as the obstruction of main roadways — thus preventing ambulances, among other vehicles, from reaching their destination — to have a company offering impeccable customer service such as Uber expelled from Colombia.

Uber, however, is not even offering a taxi service: you can’t flag an Uber car on the street, you must order it exclusively by means of a web application and you can only pay with credit card. And the taxi drivers’ argument that Uber cars — of which there were only 500 in May — don’t have to pay a series of taxes and fees that are requested of yellow taxis (see comment thread here) is simply ludicrous, because an Uber ride is far more expensive than one in a regular cab.

In essence, we are discussing two different markets. The taxi lobby, however, are seeking to intimidate the government into forcing everyone into a single one, which is naturally the one they have dominated for decades. They obviously don’t grasp that, increasingly, people prefer an alternative to yellow taxis, not because their price is too steep, but rather because their service is awful (see “Ten Reasons for Uber to be in Colombia”).

The notion that “the customer is always right” is as alien to the Colombian taxi pressure group as an Alphorn, cricket, or a Komodo dragon. The gild has thus chosen to force consumers to pay for a service they don’t want, instead of fighting against the real oppressor: Uldarico, who does to passengers’ pockets (and to those of his own drivers) what his near namesake Alaric did to Rome in 410 AD.

It’s not even about Uber; it’s about the individual’s ability to remain free of the influence of self-serving peddlers, whose logic in arguing that the state should “reserve the domestic market for domestic industry” is essentially that of Bastiat’s candle makers.

Daniel Raisbeck Daniel Raisbeck

Daniel Raisbeck is the PanAm Post's Chief Editor. He ran for Mayor of Bogotá in 2015 as an independent candidate. Follow him @DanielRaisbeck.