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.
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

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs

World Currencies

EUR
USD
0.8982
JPY
USD
121.07
GBP
USD
0.6376
CAD
USD
1.2215
INR
USD
63.612

Rates may not be current.