Aruba’s Taxi Reform: Learning from Curaçao and Ending Artificial Market Caps

In my recent column, “Aruba Taxi Reform: Essential Fixes and the 2024 Ministerial Decree”, I outlined critical changes needed to modernize Aruba’s taxi industry. While Aruba has the Aruba Fair Trade Authority (AFTA), we must also learn from the findings of our neighbors in Curaçao, where their Fair Trade Authority of Curacao (FTAC) has taken a strong stance against anti-competitive practices in the transport sector.

One key takeaway? Artificially capping the number of transport permits is bad policy. FTAC has explicitly stated that the government should not limit permits to control the market, as this creates anti-competitive conditions that ultimately harm consumers. The same reality applies to Aruba, yet we continue to operate under outdated regulations that restrict supply instead of allowing the market to function properly.

Artificial Permit Caps Hurt Consumers and the Economy

Curaçao’s FTAC found that limiting the number of taxi and transport permits leads to higher prices, poorer service, and reduced availability of transportation options for the public. In other words, when the government restricts the number of taxis or other transport providers, it benefits a select group of permit holders while harming consumers and businesses that rely on these services.

In Aruba, the impact is likely the same, if not worse. With our growing number of hotel rooms and tourism expansion, demand for public transport is increasing across all categories. Instead of artificially capping licenses, we should be expanding the supply of taxis, ride-sharing, and other public transport options to match demand.

What Aruba Can Learn from Curaçao

   •   Stop limiting permits arbitrarily. The market – not outdated policies – should determine the number of taxi and transport licenses.

   •   Increase public transport availability. With more hotels and visitor growth, we must expand supply in all transport categories, not just keep an artificial cap that benefits a few.

   •   Recognize that capping permits is anti-competitive. If FTAC in Curaçao found that these restrictions harm competition, the same logic applies to Aruba.

The Root of the Problem: Poor Leadership and an Archaic Legal Framework

One of the biggest obstacles to meaningful reform is the poor management of Aruba’s transport department, which has been run for too long by incompetent individuals – often appointed based on political favoritism rather than expertise. Instead of choosing the best horse from the stable, successive governments have used the department as a dumping ground for political appointees, leading to inefficient policies, poor enforcement, and outdated practices.

To make matters worse, Aruba’s transport laws are archaic and in desperate need of reform. While the economy and consumer expectations have evolved, the legal framework governing taxis and other transport services remains stuck in the past, failing to accommodate modern market realities.

What Aruba Can Do:

   •   Appoint competent leadership. The transport department must be led by professionals with the expertise to modernize the sector, not political figures looking for a paycheck.

   •   Overhaul outdated transport laws. The legal framework must be rewritten to promote fair competition, innovation, and consumer protection.

   •   Ensure accountability. The government department responsible for transportation policy should be subject to performance reviews and independent oversight to prevent mismanagement.

Enforcing Compliance: Licenses Must Be Used Correctly

Another issue that must be addressed is ensuring that transport licenses are actually being used as intended. Too often, taxi and transport permits are issued but not utilized properly, or they are transferred, rented out, or used for unintended purposes – all of which distort the market and limit availability.

What Aruba Can Do

   •   Strictly enforce permit regulations. Authorities must ensure that licenses are used by the individuals or companies to whom they were issued, preventing abuse.

   •   Conduct regular audits and inspections. Taxi and transport operators must comply with the terms of their permits, with penalties for non-compliance.

   •   Revoke unused or misused permits. Licenses that are not being used correctly should be rescinded and reallocated to ensure proper market function.

Preventing Market Manipulation by Taxi Associations

A common issue in small island economies is the disproportionate influence of taxi associations in shaping regulations. When governments allow these groups to dictate permit issuance, it creates an anti-competitive environment that benefits a select few while hurting consumers. Curaçao’s FTAC has emphasized that governments must remain neutral and avoid being swayed by industry pressure.

What Aruba Can Do

   •   Ensure transport policies serve the public, not just industry insiders. Taxi operators should not determine how many competitors enter the market—only consumer demand should dictate that.

   •   Prevent price-fixing and collusion. Associations should not be allowed to set fares in a way that eliminates competition and inflates prices.

   •   Break up monopolistic control. If a few groups control most permits, the government should ensure more independent drivers can enter the market.

Encouraging a Dynamic and Competitive Market

Overly restrictive permit issuance stifles competition and innovation. Curaçao’s model supports a system where new entrants can introduce fresh business models – whether through app-based ride services or improved customer experiences. Aruba must follow suit.

What Aruba Can Do

   •   Allow flexibility in service models. Instead of forcing all drivers into traditional taxi associations, Aruba should welcome independent drivers and digital ride-hailing services.

   •   Encourage competition to improve quality. A competitive market leads to better service, fairer pricing, and more consumer choice.

   •   Ensure regulation promotes competition, not restriction. Rules should focus on consumer protection and safety, rather than limiting competition to protect existing operators.

Conclusion: Aruba Must Prioritize Consumers Over Special Interests

Fair Trade Authority of Curacao made it clear: artificially limiting transport permits is anti-competitive and harms consumers. Yet Aruba continues to make the same mistake, keeping unnecessary restrictions in place while demand for transportation services grows.

It’s time for policymakers to listen. We must increase supply to meet the needs of our expanding tourism sector, enforce existing transport regulations, reform outdated laws, and ensure leadership is based on competence—not political connections.

I hope that the new minister in charge of transport will take decisive action and learn from the lessons of Curaçao, adopting best practices to create a fairer, more efficient transport system for Aruba. The time for change is now.

The question is, will our leaders have the courage to change course?

I look forward to your thoughts – unless you’re part of a taxi cartel or paid for your taxi permit, in which case, I totally understand if you’re not a fan of this one. 😆 See you next week, and don’t forget to check out more of my blogs and podcasts at www.lincolngomez.com. 🚖💨