It’s Time for the Uberzation of Montenegro

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The Board of Economics, Finance and Budget of Montenegro adopted new changes in law related to the transportation and road traffics rules. New rules have been issued by the Ministry of Transportation and Government of Montenegro. It’s their attempt to regulate taxi companies and to give a better standing (or even monopoly) for public transportation.

Montenegro, as one of the youngest European countries, does not have a developed public transportation infrastructure. Instead, the Balkan country was relatively open and barrier-free for private enterprises in the transportation industry. As a result, there was a competitive market in transport services, especially when it comes to taxi companies, where the prices dropped to 0.4 Euro per kilometer in Podgorica, the capital of Montenegro. In such an environment, taxi companies in particular were incentivised to provide better and innovative services to keep their customers. The constant investments in better vehicles and better conditions for passengers, contributed to the users’ experience and privacy that public transportation could not provide.

However, with the new law, the government of Montenegro tries to implement more regulations and to reduce number of taxi vehicles and private enterprises in this industry. Under this populist campaign and alleged “protection of the environment”, the government tends to create an atmosphere where it is acceptable to regulate the market and lifestyle for the so-called “common good”. The nonsense of the new law is greatly visible through the following part of the new law:

“Auto-taxi transportation is performed by conditions that are written in this law. Closer conditions, organization, optimal number of auto-taxi vehicles, minimal number of auto-taxi vehicles for persons with disabilities, minimal and maximum prices, are under control of local governments bodies”[1]

The new law not only will regulate the transportation industry but will also make difficult for citizens who use services of private enterprises to reach their destinations on a daily basis. The frequency of using private enterprises for transportation is relatively high and people in Montenegro prefer using taxi-vehicles for their local needs. This is especially true for Podgorica, the capital, which is also the administrative and business center of Montenegro with nearly 200 000 inhabitants and an infrastructure that is still under construction.

Being familiar with the Montenegrin mindset and their desire to trick the system, Uber seems to be the most logical and expected solution for the problem of the regulatory framework. The problem that appears is that Montenegrins are not familiar with such innovation, as so far there was no real need for it. Prices in the transportation industry were at its lowest and Uber drivers probably wouldn’t even be able to compete with it. Now the government is trying to regulate the market, it may be perfect timing for Uberization! It could very well be the best reaction to the regulations and market regulation. In essence, Uber drivers could reduce the prices of future private transportation services and could be the only decent competitors to public transportation services.

So far, sharing economy platforms such as Booking.com and AirBnB have had enormous success in Montenegro because they opened opportunities for many to easily share their properties, earn money and avoid taxes and bureaucracy.

It may be the time for Uber to become the new booming sharing economy platform in Montenegro. It would be the ideal demonstration of the effectiveness of the free and deregulated market. With current signals and ideas that are coming from the Montenegrin government, it seems that regulators aren’t eager to  find out what the future of innovation can bring. Surely Montenegrins should start learning about Uber, as soon, it may be the only solution for cheaper private transportation in their daily routines. The idea of Uber has never been as opportune for Montenegro as it is today.

It is certain that the new policies and reforms are just proving how wrong and incompetent are people who believe they can control markets and economy. It is an opportunity for citizens to start realizing that government is not a solution, but it is a problem itself. Uber could be that trigger. Uberization is the real deal.  Let’s let it thrive!

Source: Speak Freely Today


The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the organization. The Lucha Institute is committed to promote a dialogue for liberty, representing a variety of opinions.

Slobodan Franeta
Slobodan Franeta
Slobodan Franeta is an economist from Montenegro, president and co-founder of The Lucha Institute, a newborn think tank with aim to promote ideas of limited government, laissez-faire capitalism and individual liberty. He is also co-founder of Montenegrin Students for Liberty, Montenegrin Association of Youth and idea creator of Liberty for me network. His primary work is oriented toward role of government in education and researching paternalistic versus market mind-sets in a society.