Uber returns to Colombia less than a month after exit

BOGOTA (Reuters) – Uber Technologies Inc (UBER.N) resumed transporting passengers in Colombia on Thursday with a new service model that allows users to rent cars with drivers, just 20 days after it exited the Andean country following a ruling by regulators which the company described as arbitrary.

The Superintendency of Industry and Commerce (SIC), which regulates fair competition and protects consumers, in December ruled Uber had violated competition rules.

Uber said on Feb. 3 it was considering taking the ruling to international arbitration, noting that it violated a U.S.-Colombia trade deal and that damages from suspending its service could exceed $250 million.

“We have looked for new alternatives to keep working and help connect people in the country and also to respond to the support we have received from the community in recent weeks,” Uber said in a statement.

“Our new model will allow users to rent a vehicle with a driver, under an agreement between both parties. The application will be the point of contact which connects the two parties together to form a contract,” the company said.

Uber will offer five service choices, including options to rent by the hour, and an economy or extra large car.

The December ruling stemmed from a lawsuit by a taxi company which accused Uber of operating without meeting the requirements for public transport companies. Colombia lacks clear rules for ride-hailing apps, which also include Didi and Cabify.

Uber has more than 2 million users in Colombia and some 88,000 drivers.

Bogota-based driver Ferney, who declined to give his full name, welcomed Uber’s return, saying the service offered the best earnings potential among ride-hailing apps.

“I consider it to be good news; (the app) can once again contribute to mobility in the city,” Ferney said.

Technology companies say regulations in Colombia are outdated and could threaten the country’s position as the region’s second-most popular destination after Brazil for foreign investment.

Uber said it had paid more than $20 million in taxes in Colombia and plans to expand its investment here.