The Panamanian Government Issues Major Regulations on Uber in Panama

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After years of debating how exactly to handle Uber in Panama, President Juan Carlos Varela signed Executive Order 331 on October 31st, 2017, which imposes many regulations on the Uber service and who is allowed to drive for it. When implemented, these restrictions have the potential to severely limit the service in Panama, increasing fares and wait times.

The new regulations, which go into effect 60 days from the signing of the order, impose several limitations on who is able to drive for Uber, the cars that are used for Uber, and other restrictions on the service. Some of the listed restrictions include.

For the driver:

They must be Panamanian citizens
They must be 21 years of age or more
Have an E1 (professional) class drivers license
Own their car or have authorization from the owner
Have less than 35 traffic points on their license in the last two years
Issue their police record to the government
Register as a driver of a technology platform vehicle

For cars: 

Must be no more than 7 years old
Must have no more than capacity for 7 passengers
Must be in good working condition
Must have working air conditioning, air bags, and seat belts in all of the seats
Must be registered on the list of Technology Platform Vehicles.

Additional restrictions on Uber include the prohibition of cash trips, which has 6 months until it takes affect.

Some of these regulations are reasonable sounding (don’t have a ton of driving infractions and have a functioning car), while some are intended to make life harder for drivers (being 21 years of age, an E1 license, and a car of less than 7 years old), while others are downright protectionist and discriminatory, serving nobody but to try to quench a nationalist fever that is rising in Panama (requiring that all drivers be Panamanian citizens).

The ban on non-citizen drivers is perhaps the most egregious item on this list, as it restricts even drivers who are permanent residents and have work authorization. It continues a trend in Panama of attempting to create an underclass of residents: legal permanent residents who have permission to live in Panama and spend their money supporting the Panamanian economy, but are becoming more severely restricted  from actually working to earn a living to support their family.

Many of the other items on this list are also hypocritical, given the state of the taxi system in Panama. When is the last time you drove in a taxi that’s less than 7 years old, with working air conditioning, that is in good working condition and has all of its seat belts? It’s like finding a needle in a haystack. Uber issues its own regulations of cars in its service, requiring that they have air conditioning and are in good condition, but I’ve definitely driven in some Ubers that are more than 7 years old.

Uber issued a statement in response to the decree, blasting it as discriminatory and saying they are committed to an “Uber without limits.” In their statements they claim that the regulations will drastically increase wait times, as there are more than 6400 drivers on the platform (80% of all drivers) who would be prohibited from driving under the new regulations. Uber also claims that the restrictions on cash trips will limit less than 20% of the Panamanian population to be able to use Uber (for lack of a credit card), and that 52% of trips are paid for in cash. The have also pointed out that for the moment, Uber will continue to operate as normal, as the regulations do not go in effect for 60 days.

We will see if the government decides to change course on this, or potentially make it one of those “on the book” regulations that Panama seems to have, but are seldom enforced (like pretty much all of the taxi regulations). It’s hard to imagine this will be popular with the Panamanian people, who are increasingly using Uber as a safe, comfortable alternatives to the taxi service. Unfortunately, the new regulations seem aimed at protecting the taxi drivers in Panama, rather than serving Panamanians as a whole.

 

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