There are opposing views as to whether a license is needed in order for the app to operate.
Uber provides its customers a transportation network through an application that connects drivers registered with the Company with users requiring transportation. Once the corresponding driver provides the service, the passenger may provide a public rating on the quality of the service.
With Uber’s imminent arrival in Costa Rica, there has been much speculation as to the legal viability of this service in terms of a) whether a Government-issued license is needed for operation, and b) the legal nature of the relationship between the Company and the drivers providing the service.
On the first point, there are two opposing, albeit legally-based positions. One is that no license is required to provide Uber’s services—a position which is shared by the authors —and the other holding that licensing is indeed necessary.
One of the main reasons that Government authorization should not be required is that no legislation exists regulating a service that uses an application on a mobile telephone. In other words, there is an existing gap in the law.
The Political Constitution grants fundamental rights to autonomy of will and freedom of commerce and enterprise. The first right makes it possible for an individual to carry out any type of activity so long as it is not prohibited by law, and the second right makes it possible to freely carry out commercial or entrepreneurial activity.
We are now faced with a service which is contracted through a digital platform, for which there is absolutely no regulation. It is also an economic activity that is new to the Country and has never been contemplated by legislators. Therefore, according to these Constitutional rights, and based on the fact that Uber’s services are not regulated, no licensing of any kind should be required to carry out the activity.
On the other hand, those who defend the position that Uber must first have a permit or authorization from the Government, allege that various laws, such as the Law Regulating Remunerated Public Transportation Service to Individuals in the Taxi Modality, Law Nº 7969 (modified by Law Nº 8955) and the Law on the Authority Regulating Public Services, consider Uber’s service to be a public service, which is under State mandate and therefore may only be provided if a license is obtained beforehand.
It is argued that according to the above legislation, any remunerated means of transport of individuals by automobile and any other type of automotive vehicle, whether offered to the general public, to groups of users, or to certain groups of people with specific needs, is a public service, and Uber qualifies as having these characteristics.
It is further alleged that even though the service is not exactly equivalent to a Taxi's service, it could fit the modality of special taxi (which requires a permit from the Ministry of Public Works and Transportation) as established by Law Nº 8955, which modified Law Nº 7969.
Following this second line of reasoning, then Uber should have a license in order to operate in Costa Rica, even though it is not an activity that is regulated or anticipated by legislators.
Finally, with regards to the legal status of the relation between vehicle owners and the company, an issue that will inevitably have to be analyzed once Uber starts up operations in the country, in our opinion this should be one of professional services.
This is because there is no exclusivity in the commercial relationship; the service is only provided when required by the user and for a specific time. In other words, there is no restriction as to schedule, the equipment for the service is provided by the owner of the vehicle, the commercial or business risk is assumed by the vehicle owner, and vehicle owners are not subject to any form of disciplinary authority since they have full autonomy regarding the use of their own vehicle.
Equally, the terms of this private commercial contract are freely defined by the parties.
This is indubitably a novel topic that warrants exploration throughout several articles, as it involves the development of services using new technologies, so legislation must therefore be adapted to these changes.
Until such changes are made, however, there should be no restriction on the exercise of freedom of enterprise.