Ride-sharing apps surge in Venezuela as public transportation declines | Business news

CARACAS, Venezuela (AP) — Ride-sharing apps like Uber, DiDi and Lyft may have traveled across much of the globe, but they have yet to roll into Venezuela, where U.S. sanctions and years of hyperinflation and other woes have made it difficult to operate.

So a handful of local entrepreneurs have launched their own ride-sharing apps — and it seems they’re finding a welcome among customers frustrated by scarce taxis, outdated buses and an antiquated subway system.

Department store buyer Maria Arreaza, 39, has long depended on public transportation to get to her downtown office and was intrigued by the ads for the new Ridery app, though she was skeptical at first.

“I said, ‘Well, I’ll do the test.’ I made a service request and the app seemed very friendly. I kept trying, I asked for more favors … (and) so I became a high frequency user.”

So much so that when her mother spent nearly two months in the hospital due to COVID-19, she requested at least four trips a day to the hospital and then home or to work.

Ridery is one of at least three Venezuelan ride-sharing apps that launched during the pandemic — and that took advantage of the de facto currency switch from the Venezuelan bolivar to the U.S. dollar, which helped curb years of soaring inflation. The new services set prices in dollars and allow riders to pay with bank cards or transfer services instead of bills.

Public transport across the country is a mix of public and private enterprises, all of which have been in decline. Some of the buses around Caracas are so old that they’ve earned nicknames like the Immortals, while others have proved too lethal due to lack of spare parts or maintenance.

Parts of the city’s metro are often out of service. Meanwhile, the city is running out of taxi ranks after years of hyperinflation and foreign migration decimated much of the middle class that patronized them.

Pickpocketing, sweat and noxious fumes are commonplace at street level and on the subway.

All are also struggling with payment methods, partly due to the shortage of bolivars. The government system doesn’t accept foreign currency, and private operators can’t easily give people change unless the fare is rounded up to the equivalent of a dollar bill: quarters, dimes, and nickels aren’t in circulation.

And in a country where there is a lot of suspicion and mistrust, the information that apps provide about the driver, vehicle, cost and route has attracted consumers.

“Everyone told us we were crazy, that no one here was going to get into a car with a stranger, and so we launched with our own investment … seeing what would happen,” said Gerson Gomez, CEO and founding partner of Ridery, which was launched in March 2021.

“Delivery requests have already started to increase in Venezuela. Dollarization has allowed common e-commerce transactional means like credit cards to be really accepted in Venezuela, and also … you’ve heard from a lot of people that the city is a little bit safer.”

According to the company, the program now operates in 12 cities and has 400,000 trips per month with 12,000 drivers.

Its main competitor, Yummy, which launched in 2020 as a delivery app and later moved into ride-sharing, did not respond to a request for an interview.

However, application services are not available to everyone. The minimum wage in the country is $30. Average monthly wages in the private sector are less than $100. So even a trip of a few miles for $3 can be a big part of many budgets.

Gerzon said drivers make an average of more than $700 a month, excluding expenses such as gas and maintenance. He added that he thinks ride-sharing and delivery apps help even those who don’t use them.

“When a man who works in your store and makes $50 tells you he’s going to quit because he’s going to work in delivery with a motorcycle that his cousin will lend him and he’s going to make $400 a month, you’re being forced to increase salary,” Gerzon said. “I think those additions have helped in cities where they’re raising wages a little bit.”

App rides tend to be cheaper than taxi fares, though so far they haven’t sparked the kind of large-scale protests seen by taxi drivers in other countries.

And some drivers say that they did not get the profits they had hoped for.

After seeing an ad on social media, William Devia passed a vehicle inspection and interview to become a driver for the app in October. He had been a taxi driver for 10 years, and since taxis in Caracas are only marked by lights on the roof – no special paint or additional signage – he decided he might as well give the app a try.

After several trips, 33-year-old Devia decided that nothing would work out.

“The customer will always look for the cheapest,” Devia said. “Everyone takes care of their wallet. It was unprofitable because they (the programs) demand a lot — that there is not a single scratch on the car — for how few people will earn.”

But as for Angel Altuve, the 10 trips he strives to make each day help him supplement his $30 monthly pension. Altuve was fired from the leadership position after 20 years due to the crisis in the country.

“It depends on the day because there are times when there are only minimum rate trips. This is a random thing, – said 60-year-old Alduv. “So for those 10 trips I could make $20 from the net profit I had left. But if the services go to more remote places, I could make $45-$50.”