Transportation Authority Upholds Fine Against Cabify in Another Blow Against Ride-Hailing Apps in Colombia

After further review, Colombia’s transportation authority has upheld a fine of $170,000 USD (516 million pesos) against the ride-hailing app company Cabify.

The firm, which connects professional drivers with users in something of an Uber model, was sanctioned for being in violation of Colombian laws that only permit licensed personnel to provide private transport, according to the Superintendent of Ports and Transport (Supertransporte).

“It is our obligation to investigate and sanction any company — domestic or foreign — that violates these rules,” said Javier Jaramillo, head of Supertransporte.

The penalty was originally levied against Cabify Colombia on May 4 and highlights the contentious relationship between the government and services such as Cabify and Uber. While these disruptive firms, both in Colombia and across the world, continue to position themselves as technology companies that merely connect drivers with people in need of a ride, officials in Colombia see them as unauthorized transportation providers operating in violation of the law.

Jaramilo said that Cabify qualifies as a transportation company for several reasons, including that it establishes a price for transporting passengers and facilitates access with the driver. The vehicles that Cabify drivers use also fail to meet the conditions required for private transport, according to the official.

“It’s clear that Cabify intends to forego responsibility by saying that it is only a technological platform and not a provider of transport services,” said Jaramillo. “But in recognizing its role as an intermediary, the law empowers us to punish it for facilitating violations of the transportation rules governing the country.”

Cabify, and even more so Uber, is in wide usage in the country, and officials have struggled to act decisively against it. While both are deemed illegal technically, they have not been forced to cease operating and instead exist in a gray area that remains without any practical resolution.

The key conundrum is that ride-hailing apps are very popular with users — especially on the congested streets of Bogotá where finding a traditional taxi is regularly a challenge at peak hours or whenever it rains. But the apps are hated by traditional taxi drivers, who have conducted multiple protests against these companies by going on strike and blocking roads throughout major cities in Colombia. Various media reports even detailed cases of taxi drivers attacking Uber drivers.

Overall, this was the fifth fine against ride-hailing companies, according to Supertransporte. Uber has been fined twice for a total of roughly $266,000 USD (795 million pesos), and the popular Easy Taxi and Smart Taxi have each been hit with fines of $170,000 USD (516 million pesos).

Photo credit: Petar Milošević