Don't Bet on the Taxi

The same free market concept that led to a concession of a taximeter plate of almost zero original cost to reach a value of tens of thousands of dollars, must now be applied to the irruption of collaborative transport services.

Friday, January 25, 2019


Jorge Cobas González
Founder of CentralAmericaData

In a society where the liberal economy concepts are practiced, any solution to the conflicts generated by new technologies to produce goods or services must look forward and not backward. That the path of progress does not admit obstacles is an axiom that intelligent governments cannot ignore, since the interest of consumers will sooner or later prevail, as history testifies.

For the conflict between taximetrics corporations and collaborative transport digital applications, of which UBER is the emblem, the solution is clear and has already been applied in many parts of the world, on the basis that it is the interest of consumers that should prevail.

In many cities, taxi businessmen analyzed and adopted the characteristics of collaborative transport systems that have consumer preference. Thus, they developed digital applications that emulate, for example, that of UBER, by means of which the consumer can choose with extreme ease through their cell phone, the type of vehicle in which they want or need to be transported, they can know the person who will drive them knowing that their identity and conditions for doing so are verified by an organization, they do not need to carry cash to pay for the service - thereby avoiding eventual theft for both the passenger and the taxi driver - and, the best of all that the collaborative economy brought, can qualify the service, which not only tends to improve it, but also allows other consumers to exercise the freedom to choose what best suits their interests.

Certainly, that the interest of the taximeter businessmen is to protect the value of the investment they have made in that asset of many thousands of dollars that is worth today a taxi plate. Legitimately, these businessmen took advantage of the shortcomings of the rules and, within the framework of free trade, accumulated taximeter concessions whose value today is seriously jeopardized by that same free trade.

Sheep breeders hated synthetic fabrics, stagecoach owners hated automobiles, glassmakers lamented plastics, and accounting firms fell to their knees at the digital bill. Many of these businessmen, overwhelmed by scientific and technological progress, went bankrupt and their companies disappeared. But some of them, the most intelligent, adapted and survived, after accepting the loss of their market preeminence. This is what the taxi businessmen must do: adapt and survive by accepting the loss of value of their abusive concentration of taximeter plate concessions.

From the viewpoint of a government with normal and legitimate concern for the sources of work, there is no conflict: the number of jobs to drive will be the same, that is, the one demanded by the market. People will not travel less because of collaborative transport, so working hours for drivers will be maintained, while there will be a positive effect on the overall productivity of the economy by optimizing the use of material and human resources for the transport of people.

And local governments and economies will also win, since collaborative transportation systems need not be global, as evidenced by their efficient local existence in many cities around the world, with no profits going to California.

The traditional taxi businessmen, like the glass manufacturers, have already lost, because they have not adapted. The disappearance of inefficient businesses is a natural and necessary phenomenon in a liberal economy. Intelligent governments should not meddle in these conflicts which, at the end, must have, and happily have, a winner: the consumer. Governments that are obtuse or servile to corporate interests will only be able to delay the inevitable: progress.

Taxi drivers, some with damages and some with profit, will survive. And society will also win.

More on this topic

22nd Century: Teleportation Regulated in Costa Rica

January 2019

The very low-cost system that allows people to tele transport from one place to another will have to pay an additional fee to subsidize the old motorized transport system called taxi.


Jorge Cobas Gonzalez
Founder of CentralAmericaData

Collaborative Economy: Plan to Regulate Uber

January 2019

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

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.

Taxis in the face of UBER: "Times change, we do too"

May 2017

Guatemala's taxi companies reacted to UBER's threat as any good entrepreneur does: innovating in order to improve and be more competitive.

In other countries taxi drivers are trying to resist the progress that the collaborative economy represents for users, relying on alleged "acquired rights" with the complicity of inefficient governments. In Guatemala, taxi companies have united and launched mobile applications that make life easier for their users.

Businesses in Favor of Uber

September 2015

Panamanian private sector representatives are defending the mode of operations of Uber, who announced the launch of its corporate transportation service in Panama City.

As in Costa Rica, the arrival of Uber has generated resistance among traditional public transport sectors, such as taxis.

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