Colombian government declares moto-taxi startup Picap illegal, founders push back

Contxto – Picap, the Colombian moto-taxi app, finds itself in hot water after Colombia’s Ministry of Transport declared it to be an illegal service.

However last Saturday, Camilo Rodríguez, Picap’s co-founder declared they’re processing the necessary insurance protection policies for both, drivers and passengers. The founder claims it is not an illegal service.

He insists the accident ratio is quite low – out of 3 million trips, only three or four ended up in severe accidents, and eight minor injuries.

The Uber of Motorcycles

Picap is a Colombian app allowing users to request a moto-sharing service through their mobile phone.

Not happy with the country’s transportation system (much less the traffic jams) Picap offers an alternative for users to arrive quicker and easier from point A to point B. Over time, it has become a more affordable alternative to Uber and Cabify.

Undoubtedly, Picap has had remarkable success. Nowadays, the app has over 40,000 registered drivers, 500,000 Google Play downloads and offers around 30,000 daily trips across several Colombian cities. These include Bogotá, Medellín, Bucaramanga, Neiva, Villavicencio, Cartagena, Popayán e Ibagué.

Last October, the company announced their intentions to expand to the Mexican market.

Moto-drivers also earn up to $180,000 Colombian pesos – approximately US$57 – daily while offering trips even 30% cheaper than other hailing services like Uber.

What’s a better definition of success than having both customers and suppliers happy in the same transaction, right?

Well, perhaps complying with the law would be a good one, too.

Legal Trouble

Mintransporte, Colombia’s Transport Ministry, recently declared that it is going to pursue legal and judicial action against the moto-taxi company. The reason? Well, apparently motorcycles aren’t legitimate vehicles for ride-hailing.

Camilo Rodriguez, Picap co-founder, ensures the company is a better alternative to current transport models because it’s more affordable and it’s efficient. The founder claims moto-taxis existed in Colombia long before – Picap just arrived to formalize the service.

That argument doesn’t seem to satisfy Transport’s Viceministry, Juan Camilo Ostos, who believes motorcycles are extremely dangerous and unsafe for ride-hailing. According to the official, around 3,200 people die and 40,000 more are injured every year due to motorcycle-related accidents.

Just in 2018 alone, the governmental organization also issued over 15,000 fines for Picap patrons.

To discourage people from using Picap, the government official invited people to use public transport services instead. Finally, he said the company provides unsafe services and it’s not competing fairly with those who do pay taxes.

Final thoughts

Once more, legislation lags behind entrepreneurship. Picap found a market opportunity and a solution to a problem yet certainly has some things to take care of. It’ll be interesting to see how the company responds to governmental requests in order to be a legal business operation.

What type of alterations Picap must make is still unclear. Yet one thing is for certain – we’re curious to see how this goes.  

-VC