Until last month the Argentine taxi unions enjoyed a triumph that has now proved to be short-lived. The union, after losing the firs legal battle when they were unable to ban Uber, had obtained a made-to-measure municipal law. The legislators of the city of Buenos Aires (in a move backed by forces aligned with center-right President Mauricio Macri) approved a regulation that sanctioned the drivers who work with Uber, subjecting them to the loss of driver’s licenses and heavy fines.
The new regulation was wildly unpopular with Uber users, who protested against the new law, and supported the free use of the popular ride-sharing application. Argentine drivers began to request their passengers to sit in the front seat, so that in cases of being approached by police officers, they would not be able to be singled out as participating in ride-sharing.
Last week, was the first test for the new law, as a driver appeared in court to answer charges of violating the ban for the first time. In a favorable development for Uber, the 7th Court of Criminal, Contraventional and City Misdemeanors, acquitted a driver who had been prosecuted for “exploiting a service without authorization.” For magistrate Javier Buján there were no reasons to punish the driver who works with the application.
For Buján, “the conduct is atypical within the legal framework, given that the activity is constituted by means of a private transport contract regulated in the Civil and Commercial Code of the Nation with related contracts.” In a serious blow to the taxi unions, the ruling provided legal justification to the northwestern province of Mendoza, which was the first to authorize digital platforms as a method of contracting a transportation service.
But as if this setback was not enough, today Uber foes suffered yet another legal blow. The legislature of Buenos Aires, which recently approved the Uber crackdown, now eliminated de facto by a higher judicial ruling, advanced a new governmental regulation that obligates taxi drivers to work with new mediums. Now taxi drivers must work with digital platforms, and they also have to accept, without recourse to rejection, payments with debit and credit cards.
In this way, in a story that still has no end in sight, taxi drivers who celebrated a few weeks ago the triumph of a battle, end the year in the doldrums. On the Uber side the situation is the opposite. The application became a sponsor of the soccer team and the open television channels already broadcast the spots of the service. All this thanks to the door that opened the legalization of the service in Mendoza.
Uber has reported that its strongest growth has come in Argentina, where it is estimated that it has 1 million Uber users in Buenos Aires alone, along with 55,000 drivers. However, Argentina up til now, had created obstacles to paying for the Uber service with Argentine credit cards. This meant that users could only pay with cash, or with foreign credit cards. Drivers thus were building up commissions that they owed to Uber, which they had no way of paying.
Now, that appears to be changing. One thing that politicians of both the left and right seem to be seeing, is that regulations will not stop the free-market in action. Ridesharing is here to stay, and politicians oppose the new technology at their own peril. The taxi drivers unions may be powerful, but they are not powerful enough to overcome the will of the people, who are clamoring for freedom of choice when it comes to transportation options.