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Colombian ride-hailing Digi+ leapfrogs regulation by working with cab drivers

Don't worry, we speak : Español (Spanish), too!

Contxto – Colombian ride-hailing startup Digi+ is expanding its merry way through Bogotá and has ambitions for 2020 and beyond. 

Digi+ isn’t quite Uber though. Rather, through its app, it connects users with taxi companies to carry out transportation services. It was founded in 2014 and has been growing with a quiet ruthlessness. At the moment, Digi+ has 1,500 vehicles registered on its app and works with 10 companies in Bogotá. Drivers currently don’t pay to use the app.

However, according to Digi+’s Manager, Seyer Bernal, it intends to increase operations next year. With that in mind, it will start charging drivers a flat fee for under one dollar per service. It also hopes to have at least half the total of 52,000 cab drivers in the Colombian capital registered on its app.

Beyond Bogotá, Digi+ also has its eyes set on operating in Cali, Medellín, Santa Marta, Barranquilla, Bucaramanga, and small towns scattered throughout Colombia. Nonetheless, this may take time and a few pilot tests. This is because the startup has to comply with local authorities in order to operate properly.

But slow and steady wins the race. Particularly when it comes to the regulation of mobility apps, which still has some catching up to do in Latin American countries. Just ask fellow Colombian ride-hailing app—this one in the world of motorcycle-taxis—, Picap.

What’s the deal with ride-sharing in Colombia?

Here’s the 411 on what’s going on regarding ride-hailing apps in this Andean country.

Under Colombia’s current regulatory framework, private transportation services (like taxis) must fulfill a series of requirements to operate. These include having insurance coverage, social security for drivers and paying government fees. 

But ride-sharing systems like Cabify argue that these demands aren’t financially compatible with their business model. Consequently, they request to be placed into their own category. 

The government hasn’t given leeway in that direction and not all startups will wait around. After more than five years of waiting for signs of regulatory response, Uber called it quits with an investment project for Colombia last October. 

Despite their irregular status, these ride-hailing apps are used throughout Colombia, much to taxi drivers’ annoyance.

The Empire Strikes Back through Digi+

What distinguishes Digi+ from other platforms such as Uber and Cabify is that its system operates legally in the country. Since it connects with complying taxi companies and drivers, the startup has the government’s blessing. Indeed, the Manager of Digi+ confirms that the app is in compliance with the Ministry of Transportation.

Moreover, through its aforementioned flat fee, Digi+ also differentiates itself from other ride-hailing systems that use a percentual fee. Using a flat fee certainly will help keep drivers happy and from groaning before the government.

Digi+ also looks to rebuild riders’ trust in taxis. To boost passenger security, all drivers go through a screening process and must be registered with the government. The app’s system also uses algorithms to determine the taxi fare so users can feel assured they won’t be ripped off by their driver and a tampered taximeter.

It’s uncertain if solutions like Digi+ will help deter other ride-hailing startups in Colombia. It’s equally questionable whether the government will ever give in to the pleas of ride-hailing apps like Cabify, Beat, and Uber.

-ML

Mariana López
My topic darlings are startup management, edtech, and all-things pop culture. J Balvin is Latin America's best reggaetonero and I dare you to convince me otherwise.

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