Image: Cuban taxi driver
Dario Lopez-Mills  /  AP
Taxi driver Jordan Marrero leans on his 1952 Pontiac Catalina as he waits for passengers in Havana on Monday.
updated 1/13/2009 2:47:50 PM ET 2009-01-13T19:47:50

Cubans with classic American cars — or even rusty Russian sedans — are being encouraged to apply for taxi licenses and set their own prices for the first time in nearly a decade as the communist government turns to the free market to improve its woeful transportation system.

Under regulations published into law this week, Cuba is applying a larger dose of supply-and-demand to an economy that remains 90 percent under state control.

The move by President Raul Castro's government also breaks with the policies of his ailing brother Fidel, who long accused private taxis — legal and otherwise — of seeking "juicy profits" and fomenting a black market for state-subsidized gasoline that Cuba "had sweated and bled" to obtain.

New taxi licenses have not been approved since October 1999, and it is not clear how many new cabs will be allowed. The measure orders officials to determine what combination of "autos, jeeps, panel trucks, microbuses, three-wheelers and motorcycles" will best meet each area's needs.

"Without these taxis, especially in the city of Havana but also in the provinces, the country would practically grind to a halt," said Oscar Espinosa Chepe, a state-trained economist who became an anti-communist dissident and has written essays on pirate taxis.

He noted that new government buses have improved public transportation somewhat, "but it's not enough."

Supply and demand
In cities, the government will let more private cabs charge based on supply and demand, though a state commission will establish fare limits to discourage price gouging.

In the countryside, owners of cars, trucks and even motorcycle sidecars will be encouraged to ferry passengers at state-determined prices in areas where bus service is spotty, especially along desolate highways connecting remote villages. Those doing so will receive subsidized gasoline.

Havana retiree Barbara Costa said she would encourage her son-in-law to give up his job as a state engineer and use a 1950s Chevy that had belonged to his father as a taxi.

"It could be a great help, an economic help to the family but also to the entire population since public transportation is still very difficult," the 71-year-old said.

Sales of new cars are tightly controlled, and many of the vehicles on Cuban roads predate Fidel Castro's 1959 revolution, though drivers often replace their original engines with diesel motors that are foul-smelling but cheaper to operate.

Thousands of hulking 1950s Oldsmobiles, Dodges and Fords, as well as long-gone models like Packards and DeSotos, already operate as licensed, private taxis. Known as "maquinas" — literally "machines" — or "almendrones," which translates as "almond shells," the vehicles adhere to set routes and charge set fares.

Special fleets of modern taxis catering to foreigners also charge set fares, but only the wealthiest Cubans can afford them.

Because buses and licensed taxi services are overwhelmed, hitchhiking is common, and many of those thumbing it hold up peso notes, offering to pay anyone who picks them up.

Cost of a cab ride
Other people use their cars almost exclusively as black-market taxis, offering informal rides for a price. And a few existing private taxis already have state licenses that allow them to charge whatever passengers are willing to pay. The new law appears to be aimed partly at controlling rampant competition from unlicensed people using their cars as taxis.

"There's going to be more cars and fewer passengers, but at least everyone will have a license," said Jordan Marrero, a 35-year-old who steers a red-and-white 1952 Pontiac that belonged to his late grandfather through Havana's potholed streets, usually charging 20 pesos, or about 95 U.S. cents, per fare.

Marrero gave up his job in a state factory in 1996 because he found he could make more money driving a taxi. At first, Marrero claimed to be fully legal, but he displayed a taxi license that had not been renewed since May, explaining that he can no longer afford the 600 pesos ($28.50) a month for government permission.

He still operates the taxi, but spends most of his time parked a block from the stately capitol dome — a slightly taller replica of the U.S. Capitol in Washington — waiting to take a few passengers a day rather than risk cruising the city and being stopped by the police.

"I pay and others don't? That can't be," he said. "When everyone is normalized, I will pay my license. But now, there is just chaos and it's not worth it to be legal."

Meager margins
Nearby, a retired construction worker named Juan had all the necessary papers for the Russian-made Lada he operates as a taxi. But he too spends most of his days parked and waiting for walk-up passengers because he can't afford the gasoline required to drive around looking for business.

"We charge what the market is willing to give us, but that's still barely enough," said Juan, who said he felt uncomfortable having his full name appear in the foreign media.

Because his Lada only seats four passengers, Juan pays 400 pesos, about $21, per month for his license, but he complained that droves of pirate taxis have eaten into his meager profit margins.

"The problem is there's no control. I hope this law changes that," he said. "For now, it seems like it's easier to be illegal than to be legal."

More on: Raul Castro | Oldsmobiles

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