Ride-sharing apps are booming in Latin America
Ride-sharing apps are booming in Latin America
Uber has changed her life, says graphic designer Olga Lucia Rodriguez.
Since the ride-sharing application became available in Bogota, Colombia, two years ago, she and her three female employees no longer fear for their lives when taking a cab home after a late night at work in this crime-ridden and traffic-clogged Andean capital. Instead, they order up an Uber ride on their smart phones and breathe a bit easier.
“The safety of taxis is not guaranteed, and the mass transportation system in Bogota is enormously crowded and chaotic,” Rodriguez said. “Uber offers safety, and their drivers are there when you need to get around.” Her company even pays for employees’ Uber rides home because of the sense of security it gives them.
Rodriguez’s comments explain why ride-sharing services such as Uber and its competitors have been enormous hits in big Latin America cities in the few years they’ve been available. In fact, Uber claims that its introduction in Bogota in November 2013 was the most successful first-year roll-out in the company’s history.
But competition is stiff here for the San Francisco-based company, which often trails homegrown alternatives that use established taxi fleets rather than private cars, such as the Brazil-based Easy Taxi, which claims to have the leading application in Latin America.
On Tuesday, Easy Taxi announced it was merging with Tappsi, an app based here in Bogota, bringing together the two market leaders in Colombia against third-place Uber. A number of apps are preparing to battle for the growing number of Latin Americans who turn to their smartphones to get around.
A similar boom is underway in Lima, Peru’s capital, where Uber is just one of 10 ride-hailing and sharing applications based on Internet and GPS. Easy Taxi makes up to 50,000 trips per day in Lima, according to Transitemos civil society group. Uber says its driver base there is growing at a rate of 10% a week.
Ride-sharing programs have been enormous hits in the Brazilian megalopolis, Sao Paulo, and in Chilean capital, Santiago, by appealing not just to users but to drivers for the workday flexibility and earning possibilities. In Santiago, Easy Taxi has seen its number of trips per day double over the past year to 10,000, according to general manager Manuel Parraguez.
“What attracted me was the possibility of doing other things” in addition to driving for Uber, said Maria Isabel Sepulveda of Santiago. “I used to work in a radio taxi, but that occupied 12 hours a day.”
Driving Uber’s success in Bogota is a perception of danger surrounding taxis hailed on the street. Clients sometimes fall victim to so-called “express kidnappings” in which they are forced at knife- or gunpoint to drain their bank accounts at ATMs. In two highly publicized cases, an off-duty U.S. Drug Enforcement Administration agent was slain in June 2013 when he resisted such an attack and a young Bogota school teacher was killed in a similar incident last year.
Women feel especially vulnerable here. A recent Reuters news service poll showed 83% of women queried in Bogota don’t feel safe using mass transit, the highest of any Latin American city.
Adding to ride-sharing’s appeal, said graphic designer Rodriguez, are Bogota’s increasing traffic jams, which make rush-hour commutes an agonizing experience. And no one would claim that Bogota is a pedestrian-friendly city, she said.
“Many people said Uber wouldn’t work in Bogota because people are afraid of strangers,” Uber spokeswoman Adriana Garzon said in Bogota. “But users grew four times faster during our first year here compared with San Francisco’s launch. That shows people will trust a stranger when there is a platform as an intermediary.”
Security and congestion in big cities also explain why Uber and other Internet-based transportation platforms see Latin America as a huge growth market. Uber says it is arranging 1 million trips a month in Colombia, with 250,000 regular users and 20,000 drivers using its application.
Easy Taxi co-found and Chief Executive Dennis Wang said in a telephone interview Wednesday that his company is better established and has the largest market share in Brazil and Colombia, but recognizes that Uber’s financial resources make it a formidable threat.
“We are the major Latin American player and are looking to increase our prominence,” Wang said. “At the end of the day, there are a lot of people fighting against Uber, which is understandable because they are attracting so much investment.”
Recent investments in Uber by private venture capital firms have pegged its value at an astounding $60 billion just six years after its founding. But Easy Taxi also has attracted millions of investment dollars from Germany-based Rocket Internet and Britain-based London Phenomenon Ventures.
The Colombian launch of Uber has not been without speed bumps. Taxi drivers have mounted protests, even blockading highways, complaining that the application represents unfair competition. In the southern Brazilian city of Porto Alegre, an Uber driver was hospitalized last month after an attack by taxi drivers.
The Colombian government, which has struggled to regulate an industry that officials say generates little tax or licensing income, has drafted a law that will funnel 0.5% of all fares generated by “transportation network companies” such as Uber into a public transit fund.
As in other countries, Colombian labor advocates have criticized the lack of worker benefits for Uber drivers.
But judging from growth in users and drivers, the programs are increasingly popular. They fill the need of metropolitan users for relatively safe, cheap and reliable transportation and create wage-earning opportunities for drivers.