Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Insanity

Uber Banned in Brazil

Uber has effectively been driven out of South America’s largest country, Brazil. The networked transportation app has been banned from the nation’s two largest cities: Sao Paulo and Rio de Janeiro.

To add insult to injury, Uber has also been outlawed in Brazil’s capital, Brasilia, and another city where it was allowed, Belo Horizonte, The Christian Science Monitor reported. That means every city in Brazil that had allowed Uber has now banned it.

What is truly troubling for Uber’s future is the extent of opposition to the app in Brazil. Sao Paulo’s city council voted 43 to three in support of a ban on all ride-sharing applications that presumably includes Uber’s archrival Lyft as well.


Under the terms of the ban, Uber drivers’ cars will be confiscated, and they will face a fine of $447, which is big money in Brazil, if they are caught operating in Sao Paulo. Uber could get a reprieve in Sao Paulo if the city’s mayor, Fernando Haddad, vetoes the ban. That seems unlikely given the level of opposition to Uber in the city.

Nor is Uber welcome elsewhere in Latin America’s largest nation; around 13 other city councils in the country are considering bans on the service. It looks as if networked transportation is not welcome in Brazil.

Old-Fashioned Tactics Work against Uber

The situation in Brazil is reminiscent of France, where Uber was effectively forced out by a combination of civil disobedience, political pressure, and plain old-fashioned thuggery on the part of cab drivers. Brazilian authorities fearing the kind of labor unrest Uber sparked in France voted for peace.

One has to wonder if such old-school unionism is going to be tried against Uber or Lyft here in the USA. It might not as be effective here, because cab drivers are not a large group or a powerful force in most American cities. Nor do they seem to have any real political power, unlike some other U.S. unions, although I wouldn’t put it past the Teamsters, which has tried to recruit Uber drivers to try to organize them as a new source of dues and votes.

Once again, the news has proven that Uber is not a very good investment. It also proves that networked businesses and technologies are highly vulnerable to old-fashioned activist tactics like civil disobedience, violence, and the threat of rioting.

A big reason for that is Uber has infrastructure in the streets that be directly targeted and blocked or attacked, namely cars. Another is that taxi drivers can use old-school disobedience tactics such as blocking streets to create havoc and disrupt the city and the economy, forcing officials to choose between the common good and one company’s profits.

In other words activists or competitors can turn Uber’s most effective tactic, disruption, against it. By disrupting the community, the opponents demonstrate that Uber is a destructive and completely disruptive force that must be kept out at all costs. Naturally, politicians fearing disruption will vote for peace at any price.

Cab drivers tell Brazil politicians what they think of Uber.
Cab drivers tell Brazil politicians what they think of Uber.

This works extremely well in places such as Latin America, where there is a long history of political and social unrest. Leaders there live in constant fear of returning to the bad old days of guerrillas, dictators, and death squads, so they will make deals to ensure peace.

Therefore it looks as if Uber’s days could be numbered. Instead of a cutting-edge technology and the new economy, Uber could end up as little more than a footnote in the history books.