Colombia kicks ride-hailing Uber and Picap to the illegal curb

Contxto – Ride-hailing apps in Colombia are having some serious run-ins with the law. Within one week, different government agencies have instructed Uber and Picap to suspend their applications. 

First there’s Uber, who’s been accused of unfair competition by a taxi platform, Cotech. A judge who reviewed the case found Uber guilty and made the announcement last Friday. Specifically, Uber must immediately cease operations.

One day later, the Superintendency of Transport declared that Colombian Picap is running an illegal operation in the country and must be shut down.

Services on both applications will continue until the bureaucratic proceedings of these orders are completed.

Uber and unfair competition

Cotech, a taxi service platform, raised a lawsuit accusing Uber of unfair competition. A judge from Colombia’s Superintendency of Industry and Commerce reviewed the case. The authority agreed with the plaintiff and ordered an immediate suspension of Uber’s services.

Nonetheless, Uber isn’t obliged to follow the mandate. According to judicial proceedings in Colombia, for that to happen Cotech would have to sue Uber in a separate action and win.

Unsurprisingly, the San Francisco-based company has made an appeal.

These events add up to another major setback for Uber in Colombia following the abandonment of its plans to open offices in the Andean country.

Picap, pack up your things and go

Let’s set the record straight. This isn’t the first time Picap the motorcycle-ride hailing service gets into trouble with the government. Colombia’s Ministry of Transport had determined Picap provides an illegal service in February of 2019.

But this time around it’s Colombia’s Superintendency of Transport that’s doing the wrist-slapping. This government agency is in charge of overseeing regulatory compliance, declaring Picap’s service illegal, but above all else, unsafe for users. For this, the startup is facing liquidation.

Ride-hailing troubles

The key to Colombia’s ride-hailing controversy is the existing gray area that is its lack of regulation. With these recent developments, it makes the country less appealing to future solutions in ride-hailing that don’t consider the country’s taxi drivers—who are the first to complain when it comes to these startups.

For its part, Uber is seeing regulatory obstacles in various countries throughout the world. In London, it lost its license to operate. Followed by a ban in Germany last week. Now we’re adding Colombia to the list. 

For its part, Picap also faced its share of troubles outside of Colombia. In neighboring Peru, following a nasty scandal last November, its app continues to be blocked.

Although let’s not forget that perhaps those that will be most affected by these orders are probably the drivers themselves whose income relies on providing ride-hailing decisions.

All things considered—there’s no visible win-win scenario in sight…

-ML