The case of “De-Uberization”

A few weeks ago news were published announcing that Uber, the most popular platform for ride sharing -connection of transport requesting people with drivers affiliated with a platform through collaborative economy[1]-, could not provide its services in Colombia. This has caused several questions regarding the service provided by the Uber platform, does it harm free competition? Is the use of Uber in Colombia really prohibited? Should technology be regulated?, Among others.

What happened in Colombia responds that after a lawsuit filed by Cotech SA[2] by unfair competition, having diverted the clientele by irregularly providing the individual public transport service, it was determined that Uber had committed such anticompetitive conduct against formal taxi drivers[3]. For this reason, the Superintendence of Industry and Commerce of Colombia ordered the suspension of Uber, since the sentence is mandatory and immediate compliance[4].

Given this situation, Uber is considering resorting to international arbitration against Colombia. This has been stated by George Gordon, general director of Uber in Latin America, who recently pointed out that members of the Colombian Government have been notified of the intention to go to international arbitration for the violation of the Free Trade Agreement with the United States - a violation that It was originated after the suspension of Uber's operations in Colombia. Gordon also pointed out that the estimated losses for Uber due to the suspension of operations in Colombia amount to approximately US $ 250 million.[5].

In line with what happened in Colombia, last November 2019 the Transport for London regulator denied Uber's operating license in London[6], one of the most important markets in Europe. The discussion has revolved around whether Uber's security measures against incidents between users and driving partners are appropriate, as well as whether the identity verification processes of those who provide the service are rigorous. Uber filed an appeal against that decision which allows it to continue operating in London.

The shared transport platform has generated strong resistance in certain countries and has even become banned in others. Countries where it is prohibited: Bulgaria, Turkey, Denmark, Hungary, among others. Countries where there is resistance from formal taxis and is partially prohibited: Italy, France, Finland and the Netherlands[7].

On the safety and convenience of promoting the development of Uber there are divergent opinions. On the one hand, there are those who believe that allowing these innovations helps to improve the supply of value offered by service providers in various industries, as well as this tool -Uber- that allows people to have an extra income and users It offers a fairly accessible and practical service. On the other hand, there are those who believe that Uber should at least be regulated to ensure standards of care and risk management, as well as avoid anticompetitive practices, since otherwise the service offered to generate damage to the environment should be prohibited. market.

An additional and controversial issue is also the fact that Uber does not pay taxes in several jurisdictions. This has been observed by various tax authorities around the world and it has been indicated that tax evasion could generate distortions in competition. Although Uber operates in several countries, it is known that it transfers all its commissions to the Netherlands, thereby generating a tax scheme that allows it to minimize the payment of taxes for the profits it has.

Although innovation presents challenges, we must be open to it, so that we take advantage of it and promote it. Likewise, it is necessary to be aware of the benefits that have also generated business based on collaborative economy, such as Airbnb that now allows us to travel and rent a private or shared space to stay, or Netflix that through subscriptions offers us a vast amount of audiovisual content by streaming.

So, should technology be regulated? In a context in which digital transformation and new business models through collaborative economics (also known as sharing economy) are part of our daily life, the position that regulators must take must be one of technological neutrality. Therefore, only the most essential aspects must be regulated in response to the main risks involved in the activity. In that way, it will be possible to encourage entrepreneurs to generate more innovative ideas in a flexible regulatory environment.

In Peru, Uber and similar platforms are of daily use for many citizens who travel to work, studies, meetings, etc. In the Peruvian case, since they do not have an integrated public transport system and in good condition, people go to private means of transport to travel. Being aware of the large number of users of the well-known “taxi applications”, the Lima Urban Transportation Authority (ATU) is about to announce what the regulation for these companies will be ride sharing in April of this year[8]. Hopefully this regulation is reasonable and proportional.

Finally, there is much to talk about, as digital companies are transforming the world as we know it. For this reason, the Law must adapt and seek a #Flexible and Avant-garde Regulation.


[1] Economic model that allows people who need a service and / or product to connect through digital platforms to people who offer it.

[2] Company that provides taxi service in Colombia.

[3] Understood as those taxi drivers who are registered in a register with the competent authority to perform such activity, which also have a special driver's license.

[4] See the following link: https://www.sic.gov.co/sites/default/files/files/pdf/Acta%20Setencia%20UBER-.pdf

[5] See the following link: https://www.elheraldo.co/economia/uber-llevara-colombia-un-arbitraje-internacional-y-reclama-usd250-millones-698944

[6] See the following link: https://www.bbc.com/news/business-50544283

[7] See the following link: https://www.businessinsider.es/donde-prohibido-uber-mundo-368581?page=8

[8] See the following link: https://gestion.pe/economia/atu-tendra-lista-en-abril-regulacion-para-taxis-por-aplicativo-noticia/

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Alejandra Huachaca
Lawyer from Universidad del Pacífico (UP) and Director of Finance at Lawgic Tec. She currently works at EY LAW Peru in the area of ​​Financial Regulation and FinTech. He has studies abroad at the Institut d'études politiques de Paris (Sciences Po). Former member of the FORSETI Law Review. Email: alejandra.huachaca@lawgictec.org

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