Friday 3 February 2023

Uber almost legal in Costa Rica?

The new wording of the bill to regulate transport technology platforms such as Uber and DiDi, was affirmatively ruled on Tuesday by a majority of legislators from the Legislative Commission for Economic Affairs

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3 February 2023 - At The Banks - BCCR

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QCOSTARICA – Although there is still a way to go for Uber and other apps like DiDi to operate legally in Costa Rica, legislators this week approved a substitute text that takes the process a step closer to becoming a reality.

The text would require Uber and Didi users would pay the 13% Impuesto al Valor Agregado (Value Added Tax), for each transport service, to finance compensation for taxi drivers.

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This is established in the Economic Affairs Commission of the Legislative Assembly, in the processing of the transport platform regulation bill.

The new version presented by legislator Pablo Heriberto Abarca, of the Partido Unidad Social Cristiana (PUSC) received six votes in favor and two against and is endorsed almost ten days to the end of this Congress on April 30.

The text establishes that the formalization of the apps can lead to settlements of the concession contracts that the State has granted for the operation of taxis, who would be compensated for their investments in their taxis and taxi plates.

The idea is that by paying VAT, users finance the granting of compensation to the owners of taxi plates.

The new wording of the bill also eliminates the idea of ​​charging transport app drivers ¢92,000 for an annual operation.

However, drivers, must meet the following obligations:

  • Have a B1 driver’s license.
  • Register with the Caja Costarricense de Seguro Social (CCSS) to contribute as an independent worker for all the income received annually, with a minimum contributory base, equivalent to 50% of the minimum wage for unskilled workers (¢163,000) and a maximum contribution amount of up to half a salary basis (¢231,000).
  • Register as a taxpayer at the Ministry of Finance.
  • Provide a police report certifying that they do not have a criminal record.
  • No driver will exceed 12 hours of daily connection, either consecutively or fragmented. If this connection cap is reached on the same day, the driver will not be able to reconnect until after eight hours of pause.
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Regarding the vehicles, the requirements would be the following:

  • Ownership title of the vehicle.
  • Right of movement (Marchamo) in force.
  • An Insurance policy that must fully cover the contractual and non-contractual liability for injuries, death or damages to third parties, and disabilities caused by accidents that occurred during the provision of the private transport service.
  • The model of the vehicle to provide the service may not be older than ten years. “In the case of electric vehicles or zero emissions, the year of manufacture of the vehicle to provide the service may not be greater than twelve years,” says the text.
  • Maximum capacity of seven passengers.
  • Transport technology companies may not register more than five vehicles that are registered in the name of the same natural or legal person.
  • Have the authorization of the registered owner for registration.

The obligations of transport technology companies would be:

  • Create and update an internal registry of accredited drivers and vehicles.
  • Register as a taxpayer with the General Directorate of Taxation.
  • Provide the user with an electronic invoice that will be sent by email for each service. It must contain the cost, travel route, plate number, and type of vehicle, the full name of the driver and ID number.
  • Withhold 13% VAT and parafiscal charges.
  • Quarterly update the list of accredited drivers and vehicles before the MOPT.
  • Create a profile of each driver.
  • Ensure that insurance policies are in force.
  • Issue policies and procedures to promote user safety, prevent sexual harassment and discrimination.
  • Enable a mechanism for the evaluation of the accredited driver and the user of the service.
  • Each platform will establish the pricing schemes for its services that are easily accessible to users.
  • Pay the following registration fee before the MOPT.
  • Companies must have a mechanism for users and drivers to formulate complaints and claims through the technological platform.

Sanctions

The MOPT could impose administrative sanctions, without prejudice to the other corresponding civil or criminal responsibilities. For example, to drivers who pick up users on public roads without having a prior mobility agreement, provide the service collectively or use a vehicle not registered with the MOPT.

Traffic inspectors and municipal traffic inspectors are empowered to verify compliance with the law. In case of infractions, they must prepare a ticket that for the purposes will be defined by the MOPT via regulations.

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Serious sanctions: from one to three base salaries (from ¢462,000 to ¢1,386,000) for an infraction considered serious. For example; do not issue an electronic invoice for the service provided.

Minor sanctions: from one to two base salaries (from ¢462,000 to ¢924,000) for failing to keep the registry of accredited drivers or for not applying the requirements of the law to accredited vehicles.

What’s next?

The wording proposed by legislator Abarca must now go to the plenary session of the Legislative Assembly, for review by all deputies for its final processing in the first debate. A second reading and debate must then take place and if approved, requires the signature of President Carlos Alvarado before it can take effect.

Important to note here that the proposal had been discussed in the Legislature for more than four years without much success.

If this legislative body does not complete the process prior to May 1, it will then pass on to the next group of legislators that may continue with the task. Or not.

 

 

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