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Buenos Aires Tries to Arrest Uber Argentina Leadership, Block App

Buenos Aires has renewed its push to shut down Uber operations in the city, attempting to legally prosecute its local leadership and ban its app from use.

Argentina’s capital city, under pressure from local taxi companies, is engaged in a long-term conflict with the global ridesharing giant, which has persisted since credit card services were blocked earlier this year. Franco Amati, co-founder of the Buenos Aires Bitcoin center, details the company’s continuing struggle in the city:

“On the judicial front, Buenos Aires’ city prosecutor tried to put local Uber directors in jail. The judge denied the charges, but she agreed to try to block the app’s access, and that should happen in a few days if Uber’s appeal is not accepted.”

Uber’s continuing struggle in Buenos Aires

Uber, meanwhile, has argued that the block has no legal standing, stating that the city of Buenos Aires has no legal authority to decide the company’s legitimacy for the entire nation of Argentina. Amati points out that while there have been blocked sites in the country before, there has never been a situation like with Uber:

“Internet blocks happened before in Argentina with The Pirate Bay and a few more examples, but they worked by instructing local ISPs to block those sites at their DNS servers, or blocking specific IP addresses. If that’s the case, no one knows what will happen.”

Daniel Alós, the local organizer for Blockchain-based ridesharing startup Swarm City, believes that Uber is too strong to be going anywhere:

“I don’t think Uber would leave Buenos Aires. There are many powerful forces fighting Uber here. The taxi union has hired the best lawyers in town to suit them in the local courts, along with the government stand on the taxi camp. But Uber is a 60 bln dollar company. If they want to stay here, they have enough resources to fight back for a long while.”

Bitcoin, prepaid cards and cash help Uber get around the card ban

In an effort to block Uber from operating in the Buenos Aires area, local card companies, under government pressure, have halted service to the ridesharing company, making payments by regular Argentinian cards impossible. Amati points out how Uber has gotten around this ban by incentivizing prepaid card use, including Bitcoin debit cards:

“Local credit cards and even Neteller cards are still blocked. Meanwhile, Uber renewed the existing 25 percent discount on foreign prepaid cards and sent an email to local users mentioning many of them, including Bitcoin ones like SatoshiTango, Xapo and ZapZap.”

However, according to Amati, the situation recently changed to allow cash payments for rides, further decreasing reliance on older payment methods:

“But a week ago Uber started accepting cash for all users, so the situation changed for many users that considered getting a new card or Bitcoins was too much of a hassle.”

Uber’s centralized model may become problematic long-term

Ultimately, while Uber’s problems with governments may stem from its transformational approach to the taxi industry, it may continue to run into problems because of its large size and centralized structure. Alós believes that smaller organizations provide less visibility to state agencies seeking to regulate ridesharing:

“For sure a less centralized ridesharing operation would be a smaller target. That’s what we are trying to build. But a Blockchain-based ridesharing system, it’s not an easy task. It’s going to take time.”

Amati also sees problems down the road coming from Uber losing ground to regulators:

“I believe that future regulations will make Uber operations difficult in the future. As an example, bureaucrats may try to mandate reports on all trips from all users (we have experience on that in Argentina with SUBE, the public transport card) and that will create more incentives for decentralized technologies and privacy-minded solutions.”

Beyond company troubles, however, drivers, at the bottom of the ridesharing pyramid, end up suffering, even when Uber itself prospers. Christopher David, CEO of ridesharing startup Arcade City, sees this corporate structure as a problem that will be solved by the sharing economy:

“Uber often yields to government pressure and screws people over in the meantime. We saw that firsthand in Austin after Uber abruptly pulled out just to make an example. Thousands of rideshare drivers were out of a job and riders who relied on Uber became stranded without transportation. Any corporation that would flip a switch to deny service overnight to thousands of users is a dead company walking. Obviously, the sharing economy of the future will be shaped by decentralized networks owned and operated by the participants themselves, not morally questionable corporations with armies of lobbyists and tight ties to the government.”

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