Uber scraps US$40 million investment plans for Center of Excellence in Colombia

Contxto – Like a manual car, Uber is shifting gears with its plans to launch offices in Colombia. Perhaps not so gracefully, no longer will the U.S. scale-up install a Center of Excellence in the South American country.

Originally, Uber anticipated investing US$40 million to open a safety and support center in early-2020. However, due to persistent regulatory obstacles, the California-based company recently announced that it will invest resources elsewhere.

Obstructive legislation

Despite the widespread presence of ride-hailing apps, their use continues to be unregulated in many countries, Colombia especially. Resulting in the ambiguity, this often leads to their illegal use and occasional backlash from governmental authorities.

In Colombia’s case, sources report that Uber has been fined hundreds of thousands of dollars for failing to comply with a regulatory visit back in 2017. Despite this hiccup, Uber insisted on waiting for a clearer response from Bogotá. Time has run out, though, according to the General Manager of Uber Colombia, Nicolás Pardo.

“After six years of seeking dialogue and not seeing a roadmap towards regulatory stability and legal security, we must regretfully relocate this investment, which had been planned for the start of 2020.”

Center of Excellence

With the Center of Excellence out of the equation, Uber still estimates that it has over 2 million clients and 88,000 drivers in Colombia. Both users and chauffeurs were originally going to benefit from this proposed office that would have offered supplemental service and safety support.

Furthermore, the company estimates the loss of around 600 direct jobs due to this recent change.

Uber in Latin America

Despite losing this foothold in Bogotá, the ride-hailing platform still has a significant presence in Latin America. Reports suggest that there are over 25 million active Uber riders per month. These users reside in over 200 metropolitan areas across 15 countries throughout the region. 

Uber CEO Dara Khosrowshahi explained the company’s regional interest during an interview earlier this year. Safe to say that the executive is bullish when it comes to Latin America’s potential.

“Latin America is one of the best markets we have in the rideshare business,” he said. “It is a huge market. The GDP there is increasing. You look at Argentina for example, Buenos Aires now is the fifth-largest city for us globally in terms of trips for rides business. So, we know how to operate in Latin America.”

Today, there are already safety and support centers in São Paulo, Brazil, as well as San José, Costa Rica. Now, given Uber’s love for the region, it’s only a matter of time until the company announces where it’s off to next.

-ML