Cab Capitalism: Cuba Allows New Private Taxis

Cuba distributes private taxi permits, hoping dose of free-market can cure transportation woes

HAVANA

Jose Obdilio Duran's '57 Chevy has holes in its mottled floor, a passenger window that can't be rolled up and no inside panels on its doors. But the 71-year-old retiree wants to put the old car to work — applying for one of the first taxi licenses this communist country has granted in a decade.

About 60 would-be taxi drivers lined up early Friday at a Transport Ministry office in central Havana to fill out forms for permission to use their own cars as taxis — a rare dose of the free market on an island whose economy is dominated almost entirely by the state.

The new, private taxis are meant to help alleviate chronic transportation problems. In the capital, many people have to hitchhike to work in the morning. Things are so grave in the countryside that entire families wait by the highway for hours for transportation from one town to another.

Those willing to brave long lines at bus stops and endure sardine-like conditions can squeeze aboard former Soviet-bloc coaches that still list destinations such as East Berlin. Cuba has used credit to buy thousands of new buses from China, but they are mostly used to carry tourists and have not been enough to meet Cuban demand.

"This is one of the best decisions the state has ever made," said Luis Pozo, 67, another retiree seeking a license for his Russian-built 1988 Moscovich. Pozo said he didn't think the small free-market opening was out of step with the ideals of Cuba's revolution.

"It's not like anybody is going to get rich from this," he said.

The license gives drivers the right to ferry fellow Cubans — but not foreigners — for a monthly fee of $21.50 a month. They must pay that quota whether they make the money back or not.

The government says it will set price ceilings, but has yet to provide details. Most of those applying for licenses said they hoped to charge 10 pesos — about 50 cents — for standard trips. A separate fleet of modern cabs caters to tourists and they can charge up to $30 for a single trip through Havana.

Cuba stopped granting new licenses for private taxis in October 1999, but lifted the restrictions in January. Authorities started handing out taxi permissions in May, but were so inundated with requests that they quickly suspended the program in Havana, and only resumed in earnest on Friday.

The government has not said how many licenses it will grant. Thousands of Cubans already use private cars, either classic or modern, to give black-market rides. But they risk steep fines and even having their cars seized by the state if caught.

To an outsider's detached eye, Duran's brown Bel Air looks as if it could come apart at any minute, but he sees it differently.

"It's a beautiful car," he said proudly, before slowly puttering away. "The motor is old, almost as old as me, but it works well. It is still going strong, just like me."

Duran says once he gets the license — wait time is supposed to be about a month — he hopes to drive part-time to supplement his monthly pension of $13. He and others waiting to get the licenses said they figure they will be able to pull in about $10 a month after taxes and maintenance costs, often driving their cars along set routes where many Cubans wait for a lift.

While getting new taxis on the road will be some comfort to commuters, not everyone is thrilled.

"This is going to mean more competition," said 35-year-old Manolo Rodriguez, one of about 50 already-licensed taxi drivers waiting under the shade of a tree-lined street next to Cuba's majestic capitol dome, a slightly taller replica of the U.S. Capitol in Washington.

Rodriguez says he spends most of his 12-hour day waiting his turn in line behind other taxis, since cruising for fares uses up lots of fuel. He said he usually only carries four passengers each shift on a set route to the remote suburb of El Cotorro.

Still, that's enough to make more on a good day than Rodriguez used to earn in a month working at a cracker factory — about $15.

"If they keep giving out licenses I may only be able to get three trips a day, and that will really affect my income," worried Rodriguez, standing next to a hulking '53 Oldsmobile whose faded coat of powder blue paint had seen better days.

The loosening of taxi rules is one of a small number of limited reforms taken by President Raul Castro's government. But it seems to expressly defy the policies of his brother Fidel, who singled out private taxis as seeking "juicy profits" and fomenting a black market for state-subsidized gasoline.

Raul took over Cuba's presidency in February 2008 and has spoken publicly about the need to address dire daily life problems like transportation, housing and food shortages. But he has largely failed to solve them, and the global financial crisis has taken a toll on the island's ever-weak economy.

Another hopeful new taxi driver, Rigoberto Lamyser, said he plans to use his Czech-made Skoda sedan on weekends to earn extra cash while keeping his full-time job as a hydraulic engineer.

Vehicle ownership is strictly controlled, and most Cubans can only have cars built before Fidel Castro's revolution on New Year's Day 1959. But the 60-year-old Lamyser said he was able to buy a modern car because his job took him overseas, making him eligible for a special license.

He said he would charge 50 cents a trip unless a passanger is desperate enough to pay more.

"The market decides," said Lamyser. "It's supply and demand and even Cuba can't resist it."

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Associated Press writer Will Weissert contributed to this report.