Uber has spread its reach to yet another Latin American country, now offering its services to Ecuador´s two largest cities, Quito and Guayaquil.
This brings the total number of cities where it operates in Central and South America to 144, according to its website, and seems to confirm reports that Latin America has become the company´s focal point after exiting China last year. Brazil is already the company´s number three market in the world, while Mexico City is its busiest metropolis.
But, like many Latin American cities where it operates, Uber hasn´t exactly been met with open arms. Taxi drivers across the country have long been staging protests against these new ride-sharing applications, mainly Uber and its Spanish competitor Cabify, while the day after Uber was launched in Guayaquil on July 14th, eleven Uber and Cabify drivers were detained for not having the necessary permits.
Back in September of 2016, the mayor of Guayaquil Jaime Nebot said he would refuse to grant Uber permission to operate in the city, mainly to protect the economy of the local taxi unions. This was believed to be a strategic move in a country where taxi unions are known to have a lot of political sway. According to local media, the current mayor of Quito, Mauricio Rodas, owes his 2014 electoral victory to local taxi unions, which represent over 13,000 drivers. Not only did union representatives make public statements of support for Rodas, but they also put up ads promoting his campaign. Days later, they were requesting personal meetings with the mayor to voice their grievances.
Though both mayors seem to accept the presence of Uber and Cabify in their cities, along with numerous other alternative ride-share companies, they continue to be unregulated.
But both Uber and Cabify have refused to enter the battle against taxis, saying they don´t see themselves as competing with their services but rather offering something different.
“Uber respects taxi drivers a lot… but what we bring is something new,” said Saulo Passos, Uber´s Director of Corporate Communications for Latin America, adding that security and comfort are its main priorities. From the time you put in your initial ride request, you already know who your driver is and how much it will cost you, so “there are no undesirable surprises,” he said.
These surprises are exactly what has local citizens complaining about taxi services, where cars are often not well maintained and meters are usually turned off or “broken,” allowing the driver to barter a fee that leaves no paper trail. The latter also begs the question as to which is the real unregulated economy, since both Uber and Cabify are registered, tax-paying businesses that document each transaction.
The conflict between taxis and ride-sharing organizations seems likely to continue in the region. Clashes regularly emerge in places like Guayaquil; Santiago, Chile and Bogota, Colombia, where taxi drivers claim the unregulated businesses are stealing their customers and livelihoods.
According to Diana Pantoja, Cabify´s Global Head of PR, the real battle for these alternative modes of transportation is against private car owners.
“There are too many cars in the cities,” said Pantoja. “We´re not building cities that are made for people but we`re making cities that evolving around the cars. You can see this in the amount of parking lots that are in every city that [Cabify is] in. How many of those parking lots can we use for other purposes, building parks, schools, even hospitals?”
Both Pantoja and Passos quoted the same statistic, that generally a car is only used 4% of the time while the other 96% of the time it´s parked, either in the street, parking lot or private garage.
“We want people to understand that… owning a car is not really necessary because we have other alternatives,” said Pantoja.
Speaking from his home city of Sao Paulo, Brazil, Passos said he has already seen a change in the way people are thinking about cars. The younger generations no longer see owning a vehicle as a symbol of success, and people are more and more evaluating their need for them in cities where traffic congestion is a major problem.
Sao Paulo – Latin America´s second largest city – has long been famous for having some of the worst traffic congestion problems in the world, extending on average for a total of 180km (112 miles), or up to 295km (183 miles) on a bad day, according to reports. But according to Passos, this congestion has decreased by 13% in the past two years, which can be directly associated with the arrival of Uber in 2014 and its rapid expansion over the last year.
Ride-sharing services have already been regulated in cities across Latin America, including Brasilia, Mexico City, Montevideo, Puerto Rico and Sao Paulo. The latter was regulated in 2016 with the city of Sao Paulo applying a fee to drivers of roughly 10 centavos ($0.03) per kilometer traveled, which goes back into public spending.
Both Passos and Pantoja say it´s only a matter of time before other cities see the benefits that ride-sharing services offer and apply their own regulations, after the novelty of the technology wears off.