Argentina: After Buenos Aires and Mendoza, Uber-Taxi War Arrives in Mar del Plata

The taxi union in Mar del Plata is doing everything they can to stop the arrival of Uber, but liberal deputy Guillermo Castello is leading the charge to give consumers freedom of choice.

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Deputy Guillermo Costello, from Mar del Plata, has emerged as a champion for free markets in Argentina (PanAm Post).

A publicity poster at party headquarters in Mar del Plata highlights the start of the third chapter of an all-out struggle that has been ongoing for a long time in Argentina: the arrival of the ride-sharing application Uber, and the violent resistance it has faced on the part of the taxi unions. Already, the contentious public policy debate has boiled over into violence and brawls in both the city of Buenos Aires, the Argentine capital, and the province of Mendoza. So far, the yellow and black official cabs have lost both battles. Now they are threatening violence that is “worse” than what was seen in Buenos Aires.

But the unfolding narrative in the wealthy coastal resort city of Mar del Plata, some 400 kilometers south of Buenos Aires,  includes an element that is particularly unnerving for taxi drivers. The provincial deputy Guillermo Castello, who has gained national notoriety by speaking out on the issue of ridesharing, does not believe that it is reasonable for the government to prohibit an application that merely connects a willing driver and a willing passenger in a transaction on the free market.

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While in the City of Buenos Aires, the legislature unanimously passed a local regulation violating basic human freedoms, and thereby prohibiting the use of ridesharing apps, in Mar del Plata the taxi drivers resistant to competition have encountered a serious problem: a stubborn legislator who has deeply held beliefs, which they can’t change of steamroll over. So far, they have been unable to buy him, or to break him. It turns out that Castello is a classical liberal, and these causes for him are a matter of principle.

The fight for free-market competition in transportation is just one of the battles Castello is waging in the province, where he even has ideological disputes with his colleagues in his own voting bloc. Faced with considering new regulations of pharmacies, the deputy for the Civic Coalition-Cambiemos made an ardent defense of the freedom to choose: “Our law on pharmacies is an archaeological piece of legislation,” he said during that debate. Argentina’s legal system is, in fact, jam-packed with byzantine and archaic rules, regulations, and legislation that impedes free-market competition, hampering consumers’ ability to pay affordable prices.

One of the tiny battles of the only legislator with a clear liberal orientation in Argentina, turned into a triumphant victory recently, at least for this summer. Castello managed to extend the hours of sales for alcoholic beverages during the season from 9pm to 11pm. This is likely to represent a major economic boom for the tourism mecca of 600,000, and Argentina’s seventh largest city.

The usual threats

“If Uber opens up shop here, the reaction will be worse than what happened in the capital,” they said from the Mar del Plata Taxi Union. The city currently has 2,147 registered taxis, already has 11,000 Mar del Plata interested in starting to work with the application.

Dario Lopez, head of the taxi drivers union, took aim at Castello for his enthusiasm for free markets: “Of course I saw it, we knew that through the initiative of deputy (Guillermo) Castello they were going to open their arms [to Uber] in the city, there is a lot of money involved and he has been leading the charge.”

The discussion has just begun. For Castello, this question symbolizes “what Argentina must fight against, sectors of society that want the state to guarantee profits at the expense of the consumer.”

Ridesharing could not be a clearer example of this so-called “disruptive technology” to radically transform markets. Argentines and tourists alike have long complained of high fares, poor service, and dishonest taxi drivers. Uber offers affordable rates, excellent customer service buoyed by a ratings system, and a built-in feature that lets consumers know the price before they hail a driver.

Governments can try as they may, but no one and nothing is ultimately going to stop Uber and other ridesharing apps, because the consumers love them.

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