The Panamanian government has formally moved to regulate the country’s digital ride-hailing sector. A new executive decree establishes a legal framework for app-based luxury taxi services, placing them under the direct oversight of the Land Transit and Transportation Authority (ATTT) for the first time. The regulations, approved on April 16, aim to bring order to a segment that has operated without clear government supervision for years.
This action follows several days of meetings between officials and driver representatives. It represents a significant shift for services like Uber, DiDi, and InDrive, which have expanded in Panama without standardized fares or direct regulatory control. The new rules define the service as selective transportation requested through digital technologies.
“This decree provides the legal security that both users and service providers needed,” said ATTT Director Nicolás Brea. [Translated from Spanish]
Key provisions mandate specific requirements for both drivers and their vehicles. Authorities designed the framework to formalize operations and integrate the sector into the national transportation system.
Strict New Requirements for Vehicles and Drivers
Vehicle standards under the decree are notably specific. Eligible cars must be no older than seven years and have a capacity for five to seven passengers. They must also pass physical, mechanical, and comfort condition inspections. Each vehicle requires visible identification, corresponding insurance policies, and official ATTT license plates and decals.
Driver requirements are equally rigorous. Operators must be Panamanian nationals holding a valid E-1 type driver’s license. They need a clean police record with no sanctions over the past decade and must present a history of traffic infractions. Crucially, each driver must be vouched for by an authorized transportation organization, a provision that begins enforcement three months after the decree’s publication.
The electronic or cash payment option for fares offers flexibility for passengers. This dual system could help maintain accessibility across different user demographics.
Defining Roles and Establishing Authority
The decree clearly delineates responsibilities between digital platforms and transportation companies. Ride-hailing apps themselves cannot directly own or manage vehicle fleets. Their role is strictly limited to digital intermediation between passengers and drivers. Authorized transportation organizations assume full operational liability for the service.
Enforcement power rests squarely with the ATTT. The authority gains comprehensive control over regulation, supervision, and registration of all service providers. It also holds the exclusive right to set fares based on technical studies, ending the practice of dynamic pricing set solely by algorithms. Sanctions will apply to anyone operating without proper authorization.
This regulatory push occurs amid ongoing discussions about driver subsidies. Driver groups recently met with Director Brea to request inclusion in the national fuel subsidy program, a conversation likely to continue under the new framework.
A Transition Period Begins
While the decree is officially in effect, a three-month transition period applies for certain key provisions. The certification of operation requirement and the organizational endorsement for drivers will not be enforced until mid-July. This window allows drivers, companies, and platforms time to adapt to the new compliance landscape.
The Government of Panama has attempted to regulate this sector before. The new decree explicitly repeals the previous Decree 331 from 2017, which failed to establish effective, lasting oversight. Industry observers hope this latest effort will resolve longstanding tensions between the informal ride-hailing sector and traditional transportation services.
Panama now joins other Latin American nations in establishing a formal legal structure for the digital mobility economy. The success of this framework will depend on consistent enforcement and cooperation from the international platforms operating in the country.