The world’s biggest taxi industry disruptor made huge news recently with its $35 billion USD merger with rival Didi Chuxing in China, and Uber Colombia has also made some headlines. The ride-hailing service will begin a trial program of accepting cash payments throughout the Andean country, where previously only card-based transactions were permitted.
The cash payment option, which riders need only select within the app before their trip, will begin on August 5 as a pilot program open to a select group of users. Uber also announced that it will be introducing other payment options, including the use of a retail debit card from local Falabella stores and other platforms for electronic payments.
“After hearing the views and comments of Colombians, we understood that many of them would like to have more alternatives to pay their Uber trips,” said the company in a statement. “So we decided to introduce new methods of payment.”
Cash Benefits for Uber Colombia
If the cash-payment program is later rolled out nationwide, it could have multiple benefits. First, the option would expand Uber’s potential client base in a country where many still live outside the formal banking sector. The millions who don’t have credit or debt cards — plenty of whom do have a smartphone — previously had no way to use Uber.
Second, it would allow the company to compete under the same terms as other companies in the market. Other popular ride-calling apps in Colombia, including Tappsi and Easy Taxi, offer a similar pick-you-up-anywhere service while allowing cash payments.
Tappsi’s recent introduction of card payments shows that, for at least one company operating in Colombia, it pays to have alternatives. Tappsi, which is a service widely used by traditional taxi drivers in cities like Bogotá and Medellín, formerly only allowed cash transactions.
Uber Colombia: Above the Law?
Uber users in Colombia may also get an ancillary benefit if new payment option goes widespread. Paying in cash could give riders a layer of protection in a place where the Uber still operates in a gray area of legality.
Following the announcement, Colombia’s transport minister reminded everyone that the company is still not a legal service despite its widespread usage. “In Colombia there is a clear rule,” said Jorge Eduardo Rojas, the top official in the Ministry of Transportation, last week in Barranquilla, according to El Universal. Any company that wants to transport a passenger to a destination has certain regulations it must comply with and registrations it must receive. Uber has not cleared these hurdles, and thus “it will remain illegal,” said Rojas.
Paying in cash doesn’t make it any more legal, noted the minister. And Uber drivers in Bogotá are well aware of this, generally insisting that their passengers sit in the front seat to avoid any obvious signs they the car is being used as a cab.
But removing the necessity of using a bank account does shield the passenger, in a way, from any fallout. By using cash, people who want a convenient ride can still do so through Uber without creating any formal record of a transaction with a company that is currently still running afoul of the nation’s regulations.
Photo Credit: Andrew Caballero-Reynolds/AFP/Getty Images/Flickr