After credit card processors were ordered not to process payments for Uber in Argentina, Uber found a workaround. In particular, Uber encouraged Argentinian users to get credit cards from Xapo, a startup that issues credit cards that draw funds from a customer’s Bitcoins. Xapo issued cards out of Gibraltar and thus escaped the Argentinian injunction that targeted local credit card issuers.
Uber was found to be unlawful in Argentina, including for operating without a permit or tax-identification number.
A series of injunctions ordered the company to cease operations, and ordered telecommunications vendors and payment processors to cease supporting Uber. The Stanford Center for Internet & Society explained:
Shortly thereafter, a criminal prosecutor from the City of Buenos Aires issued an injunction ordering ENACOM (Argentina’s FCC) to block the UberApp. Apparently, ENACOM refused to comply with the injunction arguing that a local prosecutor was not a competent authority to order such a measure. On April 22, a criminal judge from the City of Buenos Aires ordered ENACOM to block Uber within the City of Buenos Aires jurisdictional limits. It is not clear whether ENACOM, a federal agency, will comply with a City of Buenos Aires order. Content circulation through communications networks is a federal matter in Argentina, which is supposedly beyond the reach of local government jurisdiction.
Finally, the Consumers Protection Agency of the City of Buenos Aires—an administrative agency—issued an injunction ordering telecoms to block the App and credit card companies to block any transaction related to the App. The injunction was issued against telecoms and credit cards as “contributors” to an allegedly harmful activity. A few days later, also a judge in Buenos Aires ordered credit card companies to cease their operations with Uber.
Nonetheless Uber continued operations, including encouraging Argentina users to pay via a Bitcoin-backed credit card.
El Salvador’s Transportation Vice Minister Nelson Garcia warned Uber that it was operating illegally and must cease doing so. He said Uber drivers could have their cars seized, have their licenses and plates revoked, or be fined.
Details from Associated Press.
After Buenos Aires banned local credit card processors from providing payment to Uber, the company encouraged passengers to circumvent the ban by using prepaid card use, offering a 25% discount on rides paid with foreign prepaid cards, and sending an email to local users telling them about the required procedure.