An opening in private transportation (Updated)

Cuba’s transportation minister announced that licenses will soon be granted to private individuals to provide transportation services in rural and urban areas, according to the Spanish news agency EFE. A resolution, described by ministry officials to EFE, will be issued that will open the way for licenses to be granted to cover routes not served by public transport. [Update: AP story in English here.]

Private entrepreneurs, trabajadores por cuenta propia, have provided transportation services since the early 1990’s, but the issuance of new licenses stopped in 1996.

Some work as regular taxi drivers, roaming and getting fares where they can, and others (boteros) work like public buses, driving back and forth on established routes across Cuban cities, picking up and dropping off passengers as they go. (There are unlicensed private taxis too; Fidel Castro ridiculed them in an aside in his last major speech in 2005, citing the guy who “drives his old car, buying and stealing gasoline all the way from Havana to Guantanamo, charging 1,000 pesos, 1,200 pesos to one of those young students who has to travel when the transportation situation is very difficult.”)

The action announced yesterday seems to apply to the boteros; the minister said that fares, routes, and schedules will be established as licenses are granted.

This decision is of limited scope, but it’s a positive sign that the government has decided to expand private entrepreneurship to provide an essential service that the government itself – in this case, after considerable investment in a new bus fleet – is not providing.

This same thinking is already evident in the agricultural sector, where idle lands are being distributed to private farmers. If it is applied to other sectors of the economy, there are many benefits to be gained in job creation, income improvement, and provision of services.