While Uber and Argentine officials argue over whether the company is an app or a transportation company, drivers suffer fines, violence, and instability.
Most Porteños, or residents of Buenos Aires, know the drill when it comes to hailing an Uber. Change the payment method to cash on the app, memorize the driver’s license plate number, be subtle when trying to match the driver on the app to the waiting car, and sit in the front seat when it arrives to look like a pal, not a fee-paying passenger.
“There’s a risk to driving an Uber,” said Fabian, 50, an Uber driver in Buenos Aires who didn’t want to give his last name. “The cops can grab us, seize the car, make us pay a fine.”
Uber’s operations in the city aren’t legal according to government officials in Buenos Aires, but Uber says Argentina is Uber’s fastest growing market. Confused? You’re not alone. Uber is a taxi service and thus illegally operating, Buenos Aires believes. Uber is a connecting app, and thus doesn’t need to follow regulations for taxi or livery services, Uber contends. This battle over Uber’s identity means that the Uber situation in Argentina is crazy.
Since 2016, Uber has been operating in Buenos Aires, the country’s capital, and rapidly adding drivers who are desperate for work in an ailing economy. Yet the city government has throttled Uber and its profits by: punishing drivers caught using Uber, banning Porteños from paying with Argentine debit and credit cards, and preventing Uber from holding an Argentine bank account thereby making it difficult for Uber to collect credit card fees, pay drivers, and take commissions. Thus, as an Uber representative described the company’s position in Buenos Aires to CityLab: “We are now more in an investing mode in terms of how we want to approach this market.”
AFIP, the Argentine federal public tax administration, has thrown its weight behind its capital city in the fight: In April, AFIP determined that Uber owes $358 million in unpaid taxes and social security: Advantage, Buenos Aires. Then, barely a week later, an Argentine court overruled the sentence on which AFIP’s findings are based. Advantage, Uber. The May 7 ruling by the court of appeals reversed earlier rulings by finding that Uber was not in violation of the specific allegations of “lucrative use of public space without authorization” and acquitted Uber of “violation of closure.”
“If it’s not a crime or a misdemeanor, they cannot say it’s illegal. We’re not violating any law or regulation right now,” Juan Labaqui, Uber’s head of communications for the region, told CityLab.
Uber issued a statement in response to the decision saying that the court ruling means Buenos Aires no longer has legal standing to block credit card payments since the court ruled that they were not guilty of those specific violations. But while this ruling removes some of the penalties owed, Buenos Aires claims that it doesn’t make Uber’s operations legal. And it’s true that the May 7 ruling also stated that while drivers were able to circulate in public space: “if some drivers do it by providing the public taxi service or remises (livery car services), they must do so with the authorization and respective licenses. If they do not do so, they will not be using the public space illegally, but will violate the rules that prevent such activities without a license or authorization.”
Uber is not interested in hearing about the rules for taxi or livery services. It denies categorization as either and says that it occupies a category for which Buenos Aires has not yet created regulation. Labaqui states Uber’s position as, “There can be a lack of regulation and still have something that is perfectly legal under Argentine law. In Buenos Aires, there is no regulation that is specific for our category.”
Citing previous court decisions, Labaqui said, “According to all the rulings so far, we are not to be fitted by force into the two categories that exist. Our objection is that we’re trying to be forced into a category that doesn’t apply to us. And that’s why we simply don’t abide by it.”
But the Ministry of Transport in Buenos Aires is holding firm that Uber is a transport service and thus the regulations already exist. “Uber does not consider itself a transport company, but one of services, connecting riders to drivers. But it nonetheless presents the characteristics of a public transport service,” Buenos Aires secretary of transport Juan José Mendez told CityLab via WhatsApp message. According to Mendez, “If Uber complies with the laws and conforms to the city standard, it can circulate without restriction.”
- Last year Uber reported 750 attacks on drivers and vehicles.