finance

As Venezuelan Migrants Flee To Nearby Colombia, A Tech Startup With Japanese Investment Has Become Their Lifeline

rappicolombia / Instagram

More than 3.4 million Venezuelans have fled their country in the past few years amid a collapsing economy and political turmoil. Many have migrated to nearby Colombia where more than 1.2 million Venezuelans are now living and those numbers could balloon to 2 million by this year’s end. This has created new challenges as well as growth, particularly when it comes to Rappi, the country’s tech-driven delivery service.

The delivery service, Rappi, has seen rapid growth in the last year, mainly propelled by Venezuelan migrants looking to get by.

The app, which was founded in Colombia in 2015, has a simple purpose to that of American delivery services like Postmates, deliver goods to people from wherever they want. An injection of $1 billion from Japan’s SoftBank helped establish the South American tech startup as a viable business.

Rappi is now operating in seven countries, Colombia, Brazil, Mexico, Chile, Argentina, Peru and Uruguay and more than 40 major cities in Latin America. It also has more than 100,000 people that deliver for the service and has become one of Columbia’s fastest growing startups.

The company can credit the rising number of Venezuelan migrants that have begun delivering for the service as a way to make ends meet. Many of them have been shut out of the traditional job market and can make about $23 dollars a day, roughly three times Colombia’s minimum wage.

Amid a failing economy and political turmoil, Venezuelans have the delivery service as a lifeline.

While Venezuela faces hyperinflation and food and medicine shortages, many are left with little to no choice but to leave their country. As these large number of migrants have relocated to Columbia, the first thing they do is seek jobs.

Migrants receive a temporary work permit, known as the PEP (Politically Exposed Persons). But that permit has come with a label. Wilander Jiménez, a 28-year-old from the city of Lara in Venezuela, has struggled to find work even with this permit. He arrived in Colombia almost a year ago and Rappi has become a primary source of income for him.

“People won’t hire you here if you’re Venezuelan, even if you have the PEP,” Jiménez told the Miami Herald. “So Rappi has become a solution for many of us.”

The company has acknowledged what their service has meant to many Venezuelans looking for opportunities.

Credit: rappicolombia / Instagram

Sebastián Mejía, Simon Borrero and Felipe Villamarin are all co-founders of Rappi. They’ve noticed the rise in Venezuelans that have taken up their delivery service as a safety net for cash and to get by during hard times.

“From day zero at Rappi we’ve always had a social mission,” Mejía told the Miami Herald. “So we are very excited that Rappi has not only become a source of income for vulnerable communities — like Venezuelan migrants, who are the face of a dramatic humanitarian crisis — but has also given them the ability to send money home.”

The company says it doesn’t know exactly how many Venezuelans work for Rappi because of its rapid growth. In 2018, the service had 20,000 deliverymen, according to media reports, that number has grown to four times as many.

While Rappi has created a stop-gap for some Venezuelans, many realize it’s filling a temporary need during their hard times.

Credit: rappicolombia / Instagram

Beyond just Columbia, many Venezuelans have relocated to other places in Latin America like Peru, Argentina, and Chile.

As hard times continue to hit Venezuela the number of people searching for new opportunities elsewhere is likely to continue. This includes Jiménez, who was a former policeman back in Venezuela. He acknowledges he’ll never get rich delivering for Rappi but it helps him get by for now.

“All of us want to go home some day when things improve there,” Jiménez said. “But this is one of the few opportunities we have now to survive…Rappi is growing because of us Venezuelans.”

READ: The Crisis In Venezuela Is Worsening. Here’s What You Should Know Right Now

A Legal Marijuana Industry Might Be What Puerto Rico Needs To Recover Financially

Finance

A Legal Marijuana Industry Might Be What Puerto Rico Needs To Recover Financially

Back in 2015, a year before leaving office, then-Puerto Rican Gov. Alejandro Padilla signed an executive order legalizing medical marijuana. Two years later, Gov. Ricardo Rossello signed the legal framework to make Puerto Rico the only Caribbean island to legalize recreational marijuana. Now, there are around 72,000 patients that have signed up for the program run by the Department of Health. Despite many legal challenges, Puerto Rico is seeing a financial boom when it comes marijuana and the cultivation of the product.

So far, $11.5 million has been added to Puerto Rico’s economy due to recreational marijuana.

Puerto Rico, which is still recovering from Hurricanes Irma and Maria in 2017, is seeing some recovery from the legalization of pot. Puerto Rico is also under extreme pressure from its $72 billion in public debt that has caused myriad problems for island residents. However, it seems that recreational marijuana might be the ticket to Puerto Rico financial recovery.

According to NBC News, Puerto Rico has issued 77 dispensary licenses and 40 shops have opened on the island. The government projections also show that cannabis legalization could generate $100 million in new tax revenue by 2020 and create more than 20,000 jobs.

In order for Puerto Rico to reach those figures, it will depend on the number of new patients. With continued customers and a growing consumer base, the projected revenue numbers are a true possibility.

“It’s a new industry with a lot of exciting opportunities,” said Puerto Rico’s pot commissioner, Antonio Quilichini, executive director of the Puerto Rico Cannabis Program and Regulation Board, told NBC News. “We are seeing more and more patients register; we went from 20 patients a week to 1,500. Patients are excited and are welcoming alternative ways of healing.”

Despite growth, there are still challenges that come with dealing with the marijuana industry that includes financial institutions.

While there is a lot of money to be made through medical marijuana, the plant is still labeled as an illegal substance. That means many financial institutions aren’t lining up to offer services just yet.

Banking seems to be the biggest challenge in Puerto Rico. Tu Coop, the only local credit union providing services to the medical marijuana industry, had to cancel credit accounts earlier this year. Banco Cooperativo, a larger bank overseeing the credit union’s transactions, stopped accepting their checks.

International policies, like the UN’s Single Convention on Narcotic Drugs, hinder banking institutions from accepting money from a business selling marijuana. This is one obstacle that has slowed the growth of the marijuana industry in several countries, including Uruguay. The bank institute block can only change if marijuana is declassified as a narcotic drug on federal and international levels.

Despite the issue being solved after a judge ordered the larger bank to reinstate Tu Coop’s accounts, there are still many hurdles to overcomes. If a few financial institutions will work with the marijuana industry then a cash business will be the only alternative. This only serves to make it harder to track numbers and can be labor intensive.

This is why lawmakers in the House are expected to vote on the SAFE Banking Act, which would let legal cannabis businesses to use federal banking institutions. It would also help relieve the tensions between federal and local governments trying to oversee legal marijuana.

What’s the future for marijuana in Puerto Rico? The sky is the limit.

Despite various challenges in Puerto Rico, the growing marijuana industry is bringing optimism. With a growing number of patients, more growers and more regulations to help ease financial concerns, the possibilities are endless on the island.

While there might be certain stigmas that follow the industry and the plant itself, the move to make recreational marijuana legal has eased some of those misconceptions. Only time will tell where the industry goes and how much of a financial effect it will have on Puerto Rico.

READ: Federal Judge Rules That Trump Administration Cannot Send Asylum Seekers To Mexico

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