News / Economy

Cuba to Partially Privatize State Taxi Firm

A taxi driver awaits customers in Havana, Cuba, Jan. 8, 2014.
A taxi driver awaits customers in Havana, Cuba, Jan. 8, 2014.
TEXT SIZE - +
Reuters
— Thousands of Cuban state taxi drivers will soon be leasing their vehicles and working on their own as part of a reorganization of the country's taxi service aimed at improving efficiency, according to rules published on Wednesday.
 
The measure follows the similar transfer of barbers, beauticians, small cafeterias and other retail services by the state to what is called the “non-state” sector as part of market-oriented reforms under way in the Communist-run country.
 
Cuba nationalized all retail business in 1968, down to the shoe-shine shops, and fixed all prices. But in an attempt to stimulate the stagnant economy and reduce bureaucracy, it is giving some of it back in a form of legal private enterprise operating on a market basis.
 
The sector now numbers 445,000 people, or 5 percent of the labor force, and is made up of private, leased and cooperative small businesses, their employees, private taxi drivers, the building trades and others.
 
The administration of Cubataxi, which operates in the local U.S. dollar equivalent called the convertible peso (CUC), will be downsized. Drivers will become self-employed, leasing a vehicle from the company at a daily rate, according to the resolutions published in the official Gazette.
 
“The idea is to eliminate irregularities in the service, the stealing of fares and reduce inflated administrative payrolls,” said Debora Canela Pina, a transportation ministry specialist at Cubadebate, an official on-line news site.
 
Cubataxi drivers are notorious for not using their meters.
 
A man drives his Soviet-era Russian Lada taxi in Havana, Jan. 8, 2014.A man drives his Soviet-era Russian Lada taxi in Havana, Jan. 8, 2014.
x
A man drives his Soviet-era Russian Lada taxi in Havana, Jan. 8, 2014.
A man drives his Soviet-era Russian Lada taxi in Havana, Jan. 8, 2014.
Canela Pina said the reorganization would improve service and 60 percent of taxis, many old Russian Ladas, would be replaced by newer models consisting of second-hand rental cars.
 
Outside the Havana Libre Hotel, two Cubataxi drivers said they hoped their new status would prove beneficial. Besides, they noted, they had no choice but to accept their fate or be laid off.
 
“This law should benefit us if there is no fine print and should be more efficient because the driver will have total control of his taxi and its maintenance,” said one driver, Alejandro Perez.
 
The new system is based on a pilot project in Havana begun in 2010 at a single garage.
 
Thirty of the more than 2,000 state taxi drivers in the capital began leasing their vehicles rather than working for a wage, a small percentage of the tips and whatever they could pocket on the sly.
 
Instead of three support staff for every driver, as in other garages, there were just three for the thirty.
 
“You pay 595 CUC ($595) for the car and then after a month 39 CUC plus 40 (Cuban) pesos a day,” Elio, one of the drivers, said at the time. He requested his last name be withheld.
 
The government reported that after the first year, the state's yearly take from each taxi was estimated to multiply 30-fold compared with before the experiment began.
 
Under the new rules, the daily rate was reduced to 23 CUC ($23) and costs can be deducted before paying income tax.
 
The drivers will be responsible for maintaining their taxi and gasoline, but can buy parts and services from the state company at reduced prices.

You May Like

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Turkish Law Gives Spy Agency Controversial Powers

Parliament approves legislation to bolster powers of intelligence service, which government claims is necessary to modernize and deal with new threats Turkey faces More

Video Face of American Farmer Changing

Average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Face of American Farmer is Changingi
X
Mike Osborne
April 18, 2014
The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.