Collaborative Economy: Plan to Regulate Uber

Arguing that traditional taxi services and Uber should coexist simultaneously, the government of Costa Rica presented a proposal to regulate the collaborative transport service.

Wednesday, January 23, 2019

Uber, the computer platform for passenger transportation that has been operating in Costa Rica for more than three years, has faced, as in other markets, the opposition of local taxi drivers, who claim that they compete under unequal conditions.
See article "7 facts to understand the confrontation between Uber and taxi drivers in Costa Rica".

The Alvarado administration presented to the Legislative Assembly a proposal to create two models of collaborative mobility in the country, which would be open or closed. The open type contemplates the regulation of remunerated transport services, such as those offered by Uber and Cabify. reports that the closed type of collaborative mobility "... would be applied only in private companies, public institutions and schools. It is all initiatives or plans that allow their workers to carpool to reduce dams and contribute to the environment."

See "Boom in Sharing Economy" y "Welcome Competition Unleashed by Uber"

The Ministry of Public Works (MOPT) reported that Law 21.228 contemplates that all Transport Platform Companies (EPT), such as Uber or similar, are declared as a public service but will not be subject to the tariff regulation of Aresep.
Another important point of the proposal is that the provision of transport services through EPT, as well as income or benefits from such activity, are subject to value added tax (13%) and tax on remittances abroad (8.5%).

The President of the Republic, Carlos Alvarado Quesada, declared that "our commitment is to advance in a system where taxis and technological platforms of transport coexist in conditions of fair competition. It is an issue that as a country we have postponed for many years and it is time to make decisions about it."

Although in the development of this proposal the Executive Branch claims to have researched successful experiences in large cities such as New York, Los Angeles, London, Madrid, Mexico City, where it was possible to regulate technology platform companies and create a scenario of coexistence between services, the representatives of Uber in Costa Rica consider that the proposal "is far from being a proposal that promotes innovation, competition and technology development."

In a statement, it was stated that "... One of the main concerns is that the project does not know the reality of the community of users and Collaborating Partners of Uber in the country. Given the environment of economic contraction and lack of job opportunities for Costa Ricans, this proposal would require that only a limited number of people can register as partners in the different platforms. In the Uber community there are already more than 22,000 families generating income and this project would limit their current opportunities, as well as the opening of new options for future generations in Costa Rica. In addition, it puts an artificial limit to the supply, which we have been able to meet efficiently in the face of the demand for the service of 783 thousand users from different areas of the country."

See Mopt and Uber's press release.

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