Wednesday 8 February 2023

Faced with survival: taxis and app drivers vying for an increasingly unprofitable service

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8 February 2023 - At The Banks - BCCR

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QCOSTARICA – The operations of transport apps has revolutionized the way of public transporting in Costa Rica.

The red (official) taxis are no longer the first and almost the only option in Costa Rica, users every day preferring more services like Uber, which began operating in Costa Rica in 2015.

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Since then, taxi plates, which for years were in high demand, have been losing their value. While from 2000 to 2015 only 254 plate concessions were turned in, from 2015 to 2020the number grew to 1,410; During 2021 so far, 23 plates have already been turned in.

To date, the Public Transportation Council (CTP) reports, the government authority for public transport permits for taxis, buses and tourism vehicles.

“It is evident that in most cases it is due to the economic situation and so much irregular (illegal) activity of transporting people makes it difficult for concessionaires to keep the license plate,” explained the director of the CTP, Manuel Vega.

Taxi drivers, in general, complain of low fare and the considerable drop in customers, partly due to the pandemic and of course, the apps.

Dennis Mora, a taxi driver for 30 years, explains the hardships faced every day by taxi drivers include stress, smog, traffic congestion, the sun, less to no customers and the apps charge cheaper fares.

Since first Uber appeared on the scene in Costa Rica, six other transport apps are now also competing with taxi drivers for business: Didi, DINKI, In Driver, Bee Go, and Onux.

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It is estimated that the apps have between 20,000 and 30,000 drivers on the streets, partly given the economic situation that the country has faced as a result of the pandemic, working for the apps has been one of the most viable options that unemployed people have found to generate income.

But it’s not all peaches and cherries. Competition among the apps is fierce.

Alfredo Román, the representative of the Private Association of Technological Mobility, explains that when Uber, the largest of the apps, arrived in Costa Rica profits were very good.

Today, drivers must deal with long hours of work, waiting hours for a trip “until literally, one gets tired” and incomes reduced by up to 50% to 60%.

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