Uber will no longer operate in Colombia beginning February 1, after a Colombian court ordered Uber to cease operations saying the company violated competition rules. The ruling also stated that the ridesharing giant broke local transportation laws. In turn, Uber stated that the decision was “arbitrary” and violated its right to due process.
The lawsuit was filed by a Colombian taxi company, which alleged that Uber illegally redirected consumers away from taxis and provided public transportation without the proper license. Taxi driver unions vied for Colombian President Iván Duque Márquez’s support to stop the operation of Uber and similar apps. In return, they would not participate in large anti-government protests against the current President, according to the Washington Post.
Uber has blamed a lack of regulation in Colombia, which has forced it to leave the country. “Uber was the first company to offer the country an innovative and trustworthy mobility alternative,” Uber said in a statement. “Today, six years later, Colombia is the first country on the continent to close its doors to the technology.” Entrepreneurs have claimed that the country’s regulations are out-of-date and may hurt business and the country. Uber said it would “use all legal avenues to defend the rights of 2 million users and 88,000 drivers in the country.” Uber will appeal the decision and is considering suing under free trade agreement terms between Colombia and the United States.
“There is a big contradiction,” Sergio Guzman, a risk analyst working with businesses investing in, said. “The government says it wants foreign investment, innovation and technology, but the nation’s regulatory framework is ossified. And it’s reluctant to accept new technologies.”
Taxi drivers have complained that Uber and other similar companies are negatively impacting their income, even though Uber drivers do not pay licensing fees to drive in Colombia’s cities. However, Uber drivers argue that there is enough room for everyone and that Uber has not destroyed taxis.
Other Uber-like companies are likely to be sued in the future in Colombia, as a result of this favorable decision to the taxi driver union. “We are now going after Didi, Cabify and Indriver,” Hugo Ospina, taxi union leader, said. Ospina stated that they would also try to ban e-scooter providers.
In Mexico, Brazil, and Argentina, Uber is also facing legal trouble. Colombia is the first South American country to force Uber to leave. Italy banned Uber from the country in 2017, and the city of London revoked Uber’s operating license last year. Uber has also faced more regulation in California, which has made it more difficult for the company to classify drivers as independent contractors instead of employees. Uber has stated that drivers are properly classified as independent contractors.