The Fight Against Uber Is Getting Violent In Brazil

Rio de Janeiro’s Mayor Eduardo Paes signed a bill yesterday banning Uber in the host city of the 2016 Olympics, and São Paulo is also on the verge of banning the service for operating as an unregulated transportation service.

Uber has over 5,000 drivers and 500,000 users since launching in Brazil a year ago, and aggression by politicians and taxi drivers alike has been mounting in lockstep with its growth.

It’s a battle Uber has been fighting on a city-by-city basis across the world, and winning almost everywhere, with recent victories in New York City and Las Vegas. But, like France, where drivers accused Uber of “economic terrorism,” taxi drivers in Brazil have been pushing back with violence.

All four cities Uber currently operates in Brazil have registered taxi driver violence against Uber drivers. In capital city Brasilia, taxi drivers attacked a private driver they mistook for an Uber driver at the airport. In Belo Horizonte, several Uber drivers have reported being followed, threatened and attacked an by taxi drivers. Taxi drivers kidnapped and beat an Uber driver in São Paulo. The head of São Paulo’s taxi syndicate recently told councilmembers, “Someone is going to die.”

In Rio, a crowd of several hundred taxi drivers protesting the service in Rio surrounded two Uber cars, called the police, who arrested the drivers and escorted the passengers to…. wait for it… taxis. At a bigger protest in July, the head of Rio’s taxi syndicate told the press, “We don’t want these pirates driving on the streets.”

While taxi drivers must pass through a battery of paperwork, courses, exams and fees to offer what is known as public individual transportation in Brazil, private individual transportation services don’t have specific regulations on the books. “This is very different from being illegal,”  Uber spokesperson Fabio Sabba says.

 

The path to regulation is playing out a bit differently in each city Uber operates in Brazil. According to Sabba, Belo Horizonte has set up a special commission to regulate Uber, and Brasilia’s mayor vetoed a bill to ban the service. In São Paulo, there are two bills on the table to regulate the service, plus one to ban it. And in Rio, the city council recently voted to fine “unregulated transportation services”, ie Uber, $600, and individual drivers $350 (about two months of minimum wage pay), for operating without a city license.

Rio’s tech-forward, TED-talking Mayor Eduardo Paes signed the bill into law today, after taking to Rio’s streets this week in a pro-taxi PR stunt, driving around a taxi followed by reporters and picking up random passengers. “I can’t drive Uber, it’s illegal,” he told O Globo.

“To please taxi owners, Mayor Paes sanctioned a completely unconstitutional law that is trying to ban technology from the city, leaving cariocas with less options to get around,” Uber responded. “We are now looking at appropriate legal measures. Uber believes that the service our partner drivers provides is completely legal and supported by federal law.”

Paes may be looking to get a piece of Uber’s action for himself. He recently said he would like to develop a rival technology for Rio’s taxi drivers, perhaps inspired by EasyTaxi, the leading transportation app in Brazil and the rest of Latin America (except for Mexico, where Uber is winning).

EasyTaxi was conceived in 2011 at Google’s inaugural Startup Weekend in São Paulo, where it won the “runner up” award. Since its humble beginnings — one of the founders sold his car to provide the company’s first financing, and they secured their first clients by going to hotel to hotel and approaching tourists —  the company has raised almost $80 million in capital to date, and has 400,000 registered taxi drivers working in 30 countries and 420 cities.

“We were the first transportation app in Latin America,” says EasyTaxi CEO Dennis Wang. “When we went to do this model, we checked what we could do — taxis, private cars, etcetera. And in Brazil, the legislation says the only way you can charge for an individual ride is to be a taxi. So we are in favor for the law that exists to be respected. But if you ask us about regulation, of course regulations of new technology should always be re-written.”

While Uber and EasyTaxi are direct competitors in Brazil as in other markets, they share a common target — to disrupt personal transportation. Uber is providing access to on-demand work to a new demographic of drivers; EasyTaxi is helping existing taxi drivers work more efficiently (making about 30-40% more money, working 30-40% less time, according to Wang)  without having to pay for a medallion.

 

And while EasyTaxi is incredibly popular with taxi drivers — Brazilians represent over 25% of the company’s 400,000 registered taxi drivers globally — they have not been so well-received by the legacy taxi industry. “Drivers love us of course,” says Dennis Wang. “One of main reasons they started using us in Brazil was to boycott the radio taxi companies. To them we are the disruptive model, and they see us as competition. We even got threatened by the radio taxis and taxi cooperatives. It was super sensitive in beginning. But with time, we got to a level of volume in which they can’t say much or do much.”

“Most drivers are not pissed about what’s happening in the industry,” Wang adds. “It’s that the law isn’t being respected. They have to buy a medallion and the next guy doesn’t. They are following the rules and the other guys aren’t.”

Uber appears to be eager to introduce new rules to regulate the service. Brazil’s Uber representative Daniel Mangabeira proposed a way forward this month in front of Rio’s Legislative Assembly — a tax similar to the 1.5% tax per Uber ride recently deployed in Mexico City. According to Mangabeira, the tax could be used to fund other transportation upgrades, including taxis.

“Uber told us they aren’t opposed to pay taxes,” an Uber driver recently told me. “But they don’t accept paying bribes or corruption under any circumstances. And some important politicians in São Paulo have asked for money, and Uber has this recorded. That’s what they told me.”

Uber’s activation on the ground has been as aggressive as their legal work, offering free rides, messaging clients for support via the app and emails, and even distributing printed letters and stickers for Uber drivers to hand to passengers. To date they’ve drummed up over 300,000 emails to São Paulo congressmen, and another 700,000 emails to Rio’s mayor, in support of the service — double the 500,000 total Uber users across Brazil.

On the driver side, Uber drivers in Rio and São Paulo told me they’ve received messages asking them to deliver the best service possible to win over support, and instructing them on how to respond if they are attacked by taxi drivers. “Call the police, take down the taxi’s number and film it if possible,” one driver told me. “They said they have the best lawyers in the world and win the battle 95% of the time.”

Uber has stopped allowing pickups in areas it deems unsafe, like Rio de Janeiro’s bus station, and messaging riders that it’s too dangerous for Uber drivers to pick up there.

 

Wang also says EasyTaxi has also been in dialogue with their drivers. “There are ways to protest, and it should never be violent. Don’t resort to violence. Passengers are not responsible for that — it’s the government.”

On the ground, Uber drivers are starting to take their own precautions. On recent rides, one driver apologized for not picking me up at my door in the rain with an umbrella — he did not want to be obviously identified as an Uber driver with taxis nearby. Another driver apologized for not wearing the customary sports coat, telling me he felt less conspicuous dressed in a sweater. Beyond the threat of violence, drivers I spoke with in Rio and São Paulo were also worried about the loss of income if Uber is interrupted. About half the drivers I spoke with went into debt to purchase new cars meeting Uber standards.

Uber is also introducing Olympic rhetoric to the fight. In an open letter published to Rio’s city council, the company wrote, “Rio de Janeiro is going through a modernization effort that will lead the host city of the 2016 Olympics into the future. But the city councilors seem to go in the opposite direction….. What is the Rio we want — the old system or new solutions? What is the message we’re choosing to send to the rest of the world, that is carefully watching preparations for the Olympics next year?”

Wang, for his part, has his sights set a bit further down the horizon. “When we have driverless cars in ten years or less, and they are all taxis, what’s the difference between Uber and taxis? Zero. It’s just that today, Uber is putting new supply in the market and being really forceful about the quality. But the experience of the driver… the car is just a detail.”