The multi-national hail-riding company suffered a major blow in the South American country. On Friday the Superintendency of Industry and Commerce (SIC) in Colombia ordered Uber to halt its services effective immediately, according to Mashable.

The decision was largely based on the grounds that Uber Technologies violated the competition rules. The lawsuit was filed by COTECH SA, which is the Superintendency as previously mentioned.

Uber immediately released a statement.

It condemned the decision and said it was an act of censorship. Uber went on to add that the action against their company infringes on the Inter American Convention on Human Rights.

This latest decision is a major hurdle for the gig economy. The decision comes at a time when Uber faces backlash as well as financial challenges.

Uber in Colombia leaves local drivers helpless

Uber has been present for some time in Colombia. According to Medellinguru, Uber arrived in 2013. It was made available in major cities like Bogotá, Cali, Medellin, Barranquilla, etc. However, in remote areas, it is harder for the company to operate.

Elsewhere, as reported by Reuters, Uber had 2.3 million active users in Colombia and approximately 88,000 drivers.

The decision will be appealed by Uber Technologies, but it remains uncertain if the case will be reconsidered.

What happens next to the ride-sharing app

The problem with Uber has been their inability to pay their share of taxes. The services are provided mainly through the mobile app and bypass traditional channels. They have avoided scrutiny by governments by having direct access to drivers, which is a functionality that is difficult to restrict on smartphones.

This is not the first time Uber faced government opposition. The company lost its license in London less than a month ago. The reasons cited there were that they were not doing enough to ensure the security and safety of users.

The head of the SIC, Andres Barreto, did confirm that other Uber services remained intact. Specifically, Uber's food-delivery Uber Eats was not impacted by the ruling.

This only affects its taxi-driving services.

What to expect from Uber in 2020

The company faces a number of problems in the new year. Not only has it suffered crackdown on its taxi services, but profitability is another matter. In an analysis by Investopedia, the California-based app confirmed it lost $1 billion on a $3.1 billion in revenue in the first quarter of 2019.

The technology company has also faced regulation on its home turf. The California Senate passed Assembly Bill 5 in 2019 and required ride-sharing businesses to treat workers as employees instead of independent contractors.
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