February 13, 2017 • 22 mins
In the past two years, Cuba has started rolling out public access to the internet. Wifi is now available through a network of hotspots-- but access is expensive, and the connection can be patchy and slow. This week, Bloomberg Technology's Pia Gadkari visits Cuba, exploring what life looks like when a country's just starting to get online. Pia and Aki hear from local entrepreneurs how the Internet is helping them grow their businesses, and discuss the potential for U.S. tech companies on the island.
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Speaker 1 (00:00):
Cuba right now is an island in transition. Entrepreneurs can
now run private businesses, Tourism is taking off, and people
across the country are gradually getting access to the internet.
In November, my husband and I went there for eight
days on vacation while everyone else in the US was
enjoying Thanksgiving. And you took some recording equipment with you
(00:24):
just in case you found an interesting story. Even though
I try to encourage you to just enjoy your time off,
you did. You did. It's true. But it was on
my very first day there that I found my story. Omero,
my taxi driver was driving us around Havana in this
beautiful pink convertible Cadillac. Okay, tell me. We passed by
(00:51):
all these parks and public squares that were teeming with people,
but they weren't really hanging out and socializing with each other.
They were wheezed onto public benches as if they were
on the subway, like hunched over their smartphones. Is many
people for gheefly phase will It turns out those crowds
(01:12):
were enjoying a fairly new luxury in Cuba three or
four year before it's impossible for internet for the people
but is figure out before. It's a many change, and
that change that Omero is referring to, that's when the
state owned telecom company at Texas began rolling out the
country's very first WiFi hotspots. That's when the Internet first
(01:36):
became available to the massive It's possible. The Internet is
not limited. The bird is the corn is no good connection,
his bird is low. But it's possible. It's through this
very patchy network access from the crowded benches of Havana's
parks that the Internet is just starting to change the
way Cubans live and work, decades after it's transformed our
(01:59):
lives lives in the developed world. Hi am Akito, and
I'm Pat Cary, and this week on Decrypted, we're going
to be asking you to imagine a time before we
hailed Uber's, before we asked Sirie for directions, before we
(02:22):
got to watch our favorite movies with just a couple
of taps or clicks. As I traveled around, I asked
people to tell me their stories. I really wanted to
understand what the internet could do for young people and
especially for people trying to set up their own businesses Cuba.
(02:50):
Maybe just a short flight from the US, but it's
actually really unlike anywhere I had been before. Okay, so
I've heard that it's an idyllic island, vegetation long, pristine beaches.
I've always wanted to visit. Yeah, Havana is like full
of gritty charm. Um. It was a wonderful place to be.
(03:10):
But actually, the thing that really struck me as soon
as I arrived is how different the economy is from
what I'm used to in the US. A couple of examples, Um,
government wages are really incredibly low, just twenty five dollars
a month, and that's in the cities. In the countryside,
it's only fourteen dollars a month. Another thing I noticed
(03:31):
is that access to information is controlled in interesting ways,
so it's not often as easy as you would think
to access news, for example, about the rest of the world.
And before I arrived, I had heard about how there's
(03:52):
a shortage of cars in Cuba, but I just didn't
understand until I got there, really how limited access to
a vehicle is is. In fact, in the countryside, most
people move around by horse and cart because there's so
few cars. Sophia, you getting driven around in that pink
Cadillac by your very own driver, Romerrow. That's a pretty
(04:12):
big luxury. Yeah, that's a treat. And it's not like
cars are technically banned in Cuba. It's just that they
are so expensive to buy that most people can't afford them.
One taxi driver told me those classic cars that you
see in all the photos driving down the Malican, they
can cost as much as fifty thousand U S. Dollars.
(04:33):
And remember, most people are just earning twenty dollars a month.
And he said that if you do manage to somehow
save enough cash to buy one of these cars, then
the authorities can often get suspicious about how you manage
to get so much money. And there's no such thing
as getting a loan for a car if you want
to buy one. In the airport in Mexico on our
(04:54):
way to Cuba, we saw people checking in flat screen TVs,
air conditioning units, and are the large home electronics. Big
ticket items are still prohibitively expensive for most people in Cuba.
So what about smartphones? Actually, interestingly a lot of young
people do have smartphones, but again they are still really expensive.
(05:15):
A few people told me the latest models aren't easily
available unless you buy them on the black market. This
is something I asked Omero, our taxi driver about. Now. Remember,
by Cuban standards, Omero is very well off. He owns
five classic cars in a place where most people don't
even have one. But still he had to depend on
(05:37):
his relatives in Miami to send him a smartphone from
the US. No, I my phone is and buy in Miami. Okay,
every ELECTRONI is a spencer in Cuba. It's very spencive.
He's positive because my family living in Miami, Like, I'm
gonna buy the phone and the TV for me. You know.
(05:58):
The people is not possibly um Miami, because I know Miami.
No resize there. They gone to Marino how the morning
for goo. The made the flight and like a lot
of other developing economies, I assume a desktop computer is
completely out of the question. Yeah. I didn't see a
(06:19):
single one while I was there. And actually until now,
Cubans have not been able to access the Internet from
their homes. Interestingly, that may be about to change. I
spoke to one Cuba trade expert. His name is Timothy Ashby.
I'm the former senior Republican political appointee in the Commerce Department.
Myself and two administrations. Timothy told me there are pilot
(06:43):
programs underway in Havana to bring internet connections to at
least one neighborhood. The Cubans have just started experimenting with
home internet access UM in Old Havada, which is the
recently restored area of the five d year old General
and they have a pilot puggle with two thousand homes
(07:04):
that have been set up for home internet access, which
is a quite revolutionary in Cuba, which because home internet
access was prohibited until quite repas unless you were a
government official or a teacher or a foreuner. So that's
that's quadramatic. Can they do plan to Experiand he also
said there's a lot of interest inside the Cuban government
(07:24):
in developing the country's infrastructure in the coming years, and
a couple of American companies are definitely interested in helping
build out that infrastructure. Google is one of them, and
in December they reached a deal with Cuba. They're going
to set up service locally on the island to store
content like popular YouTube videos for example. At the start
(07:45):
of the show, we heard Omero talking about those frustratingly
slow internet connections. Well, this deal with Google should speed
things up. And you found the Airbnb is also growing
in Cuba, and wireless carriers like Verizon in eighteen he
are now offering roaming services for tourists visiting the island,
and I'm told that US carriers are looking for ways
(08:07):
to offer services not just to tourists but also to
local Cubans. Netflix is another US company that's technically available
in Cuba, but they won't really see the benefits of
being there until the Internet becomes more accessible to more people.
And this is this is an interesting thing thinking about
why US companies are even bothering to come here. Because
(08:30):
Cuba is a tiny economy, the revenue that they generate
can't really compare to the opportunity in other markets like
China or Greater Africa. Yeah. I wondered about this too,
and I suspect part of it must be related to
the fact that they are finally able to do business
in this place that's been off limits for literally decades.
(08:51):
But I discovered something else to Cuba actually trains a
lot of world class computer scientists and programmers. That's because
they have a few very respect table technical universities and
it's kind of a surprising detail. I think for a
lot of our listeners, because so far we've been talking
about Cuba, is this incredibly poor economy. Right, most people
(09:11):
have very little disposable income. But the government has invested
in good schools, good hospitals, and good universities. Sure, so
they have all the raw ingredients for for good talent.
But these people, they come out of these great educations
and they have nowhere to apply those skills. Right, And
when I spoke to Timothy, he said that for American
(09:31):
companies it may not be so much the market opportunity
as the engineering talent that they're chasing in Cuba. The
Cuban government is on board with this too. Their goal
is not to be another India, but to be something
closer to Israel, where they have highly trained innovative um
software developers and other types of entrepreneurs. And the entrepreneurial
(09:54):
sector has actually been encouraged in Cuba. Yeah, Okay, so
that's all on the pipeline. And yet right now most
people still need to sit on a park bench to
check their email. So let's walk everyone through it. How
do people actually connect to the internet. So first you
(10:15):
have to buy a scratch card to connect to the
national WiFi network. You can buy the cards at state
run general stores and in major hotels, so like phone
cards way back in the day. Yeah, no, exactly. And
the going rate for an hour online is about two
U S dollars. Now that's incredible. You know, earlier we
talked about people's salaries being twenty five dollars a month,
(10:38):
So an entire month's wages is equivalent to about ten
to twelve hours of time on the internet. Yeah, Cuba's
internet is one of the most expensive in the world.
I talked to a woman called Laurie. She works as
a guide in a national park in a town called Vignalis.
It's about three hours away from Havana. Here's how she
explained it. But it's not easy. It's sometimes we don't
(11:01):
have a connection and is just in the one blope
of the town and in some hotels we have only
to hold us. The early have senior too, but not
in all Vignal. It's not in the house. It's impossible
in the house, and even if we want the internet
in the house is really expensive and they don't want
people with internet because we use internet. We have acted
(11:25):
at all the information and they don't want that now.
When she says they, Laurie is of course talking about
the Cuban government. But it was almost as if Cuba's
method of information control was to make it so expensive
and so slow and in convenient to use the Internet.
I checked it out while I was there, and interestingly,
(11:48):
you can access Western websites like Facebook and Twitter. They're
not censored, so very different from a place like China.
Exactly here's him again. Cubans also communicate now um by
linked In. They are active Facebook subscribers. They also access
international news, and this is something that's very intriguing to
that they are not censored, that the government will close
(12:10):
down violently antique Castro government types of science. But I've
actually tested, as you may well have too, such just
like Google, see you and I can access news from
anywhere in the world. That seems there's no independent media
in Cuba, but there is an ability to access um
foreign media, which I think is a very key differentiation.
(12:32):
Did you get this sense of what people use the
internet for? Yeah, Well, since it's so new, people are
just getting used to it. They use mostly basic applications,
things like sending emails and video calling their relatives. Who
live outside Cuba. Another thing people mentioned was social networks
Google Facebook. Interestingly, I didn't hear anyone really talk about
(12:54):
e commerce, so that there's no Amazon there, no no
one recognized the name Amazon when I tried it out.
The only person who said they occasionally buy things online
was Omero, the taxi driver we mentioned before. He said
he uses eBay to get spare parts for his car. Okay, so,
(13:18):
just until a few years ago, it was really hard
for normal people to start a business. You either had
a government job, you served in the military, or you
worked the land as a farmer. There were some limited
opportunities to run your own business. You could maybe be
a hairdresser or rent a room to tourists, for example,
(13:38):
But before Raoul Castro changed the rules, you couldn't have
any employees unless they were related to you. And it's
really striking in Cuba how little industry there is. Towns
have no shops, literally no shops, and almost everything is
still run by the government, even restaurants and cinemas. But
(14:01):
it has recently become possible for Cubans to set up
small businesses, which usually have something to do with serving tourists.
So if you have a car. You might become a
taxi driver like a marrow, or you might make small
craft objects like painted pictures or jewelry out of everyday materials.
Here's Laurie again. You can compare our business now then
(14:27):
um some years ago, and now we have more opportunities
and we have more money. And it's incribll because all
the people are common before of the American people. So
when they came, the hotel is full and they have
to go at the houses with trendrom or sometimes they
don't like the hotel because it is um a little
(14:49):
bit um different in the house. They want came to
know the real people. They want to came to see
our life and to know about our culture. So so
it's Laurie said. Most towns just have one or two
government hotels, and as a result, there's a real shortage
of hotel rooms. Luckily, renting rooms to tourists is by
(15:11):
far the most lucrative kind of business people could run
in Cuba, but until now hosts have had to rely
on word of mouth to attract guests. They depend on
host families in other towns recommending them on to travelers,
or they hang signs in front of their doors. So
this is one area where the Internet is totally transforming
(15:33):
the way people do business. You know, it's really hard
to imagine how businesses could manage without being able to
do simple things like sending up a website. Yeah, I
was very curious about this too, and some of the
most interesting stories I heard came from the families that
we stayed with that She and her husband, Yovanni, have
(15:58):
a home in the north of Cuba. Their cottage sits
on a sandy spit of land poking out into the
Gulf of Mexico, surrounded by warm turquoise water and narrow
white beaches, and their home is idyllic. They have a
small garden in the shade of an avocado tree. They
grow fruit and salad. The chickens out back, and about
(16:20):
eighteen months ago they started renting three extra rooms. They
set up a website, and then about a month ago
they signed up with Airbnb. With Airbnb, it's only been
twenty days more or less of them, it's going very well.
They send us a lot of bookings. Basically, I'm booked
for the whole year with them. It's not just Island.
(16:43):
Everywhere we stayed our host families told us, Airbnb has
had a big impact on their business. Your friend recommended
Airbnb to me and I searched for it on the
internet and it looked good for growing my business. We
got our first client through them under member nine that
was great who hosted us in a little sky blue
(17:07):
cavania in Vignalis. Now, before Airbnb, you would never know
when a guest would come looking for a place to
stay before your friends and neighbors would give you a call,
ask if you were free or if you had guests
right now, and then sometimes people would say they're coming
and then not show up. On those days, hosts would
(17:29):
simply lose the income. And Ailem told me that knowing
her security deposit is guaranteed is one of the best
things about signing up with Airbnb. Well before, it was
a bit difficult. My house was not very well known.
A lot of clients would reserve, but without the security
that they're definitely coming and if they don't show up,
(17:50):
sometimes I would send away other guests and not get
the money from any of them. So I started only
to accept day of booking. Another big bonus with Airbnb
is that posts can take bookings far in advance on
the night we stayed with Alem, we saw her actually
take a reservation as far out as April, as she
says that never used to happen before. Okay, so I
(18:12):
lem not having easy access to the internet. How is
she maintaining her Airbnb account? Yeah, you're right. She doesn't
have any internet signal at her house and she lives
an hour away from the closest WiFi hotspot, which is
in the town, so she can't manage her own Airbnb accounts.
Someone actually called her that night to update her about
the booking, and what she told me is that usually
(18:35):
Airbnb will keep in touch with her by email, so
a couple of times a week or whenever she goes
into the town, she can get online and pick up
any updates that they've sent her. Here in Cuba, we
are not free to connect to the internet from home
as well. It's very difficult. I have an email account
and that's how I keep in touch with Airbnb. This
(18:56):
is the way I connect with Airbnb. They connect with
every one this way and they do everything. They upload
the photos of the house. When I have new photos,
I send them to a representative who is based in
Havana and he has to communicate with the guests because
I don't have access to the internet. That representative I
LM is talking about. Those are people working for Airbnb
(19:18):
and Havana. It's their job to basically manage the hosts
accounts for them. Yeah, and I didn't really get it
at the time, but now that I'm thinking back, when
I was looking for places to stay in Cuba, almost
every listing offered instant booking. And you know, maybe that's
the reason that because it's just too hard for hosts
to get back to you quickly if you try and
(19:38):
message them and asking questions before you make a reservation.
So what do you think we can expect from Cuba
in the next few years. I think everyone is waiting
to see US companies, I mean international companies in general
are all eager to get into the country. But so far,
the pace of dealmaking, at least between US companies and
the Cuban government has been relatively slow. Um and there's
(20:01):
a number of pending deals that haven't closed yet. One
thing that we can count on is that the Cuban
government is interested in expanding internet access within the country,
so likely the first thing we'll see is more WiFi
hotspots and hopefully something cheaper to something cheaper than two
dollars an hour. Yeah, well, I mean, O'Mara told me
that it used to be ten a couple of years ago,
(20:22):
ten dollars an hour, So it may come down further,
and it'll be interesting to see what happens to the
relationship that the US has with Cuba under our new
president Donald Trump. I agree, I think that's a big
question mark right now. But I was interested while I
(20:43):
was reporting out this story to hear that a lot
of people are actually very hopeful the Cuban government um
is not expecting any kind of rollback what I've heard,
especially from Timothy, who is still very plugged in with
policy officials in Washington. He said that there may be
more scrutiny of deals, there may be more enforcement of
existing regulations on the U S side, but he's not
(21:04):
expecting to see a rollback. We'll just have to wait
and see. And that's it for this week's episode of Decrypted.
Thanks for listening. Tell us what you thought of this episode.
Send us a voice message. You can email me at
(21:24):
p G A D K A r I at Bloomberg
dot net, or write to me on Twitter. I'm at
Pa Gadkari and I'm at aki Ito seven. You can
subscribe to Decrypted on iTunes or wherever you get your podcasts,
and leave us a rating and a review. It helps
more listeners find your show. This episode was produced by
(21:47):
aki Ito, Magnus Henrickson, and Liz Smith. Alec McCabe is
head of Bloomberg Podcasts. We'll see you next week as
Radio Rubber Last. L
Cuba right now is an island in transition. Entrepreneurs can
now run private businesses, Tourism is taking off, and people
across the country are gradually getting access to the internet.
In November, my husband and I went there for eight
days on vacation while everyone else in the US was
enjoying Thanksgiving. And you took some recording equipment with you
(00:24):
just in case you found an interesting story. Even though
I try to encourage you to just enjoy your time off,
you did. You did. It's true. But it was on
my very first day there that I found my story. Omero,
my taxi driver was driving us around Havana in this
beautiful pink convertible Cadillac. Okay, tell me. We passed by
(00:51):
all these parks and public squares that were teeming with people,
but they weren't really hanging out and socializing with each other.
They were wheezed onto public benches as if they were
on the subway, like hunched over their smartphones. Is many
people for gheefly phase will It turns out those crowds
(01:12):
were enjoying a fairly new luxury in Cuba three or
four year before it's impossible for internet for the people
but is figure out before. It's a many change, and
that change that Omero is referring to, that's when the
state owned telecom company at Texas began rolling out the
country's very first WiFi hotspots. That's when the Internet first
(01:36):
became available to the massive It's possible. The Internet is
not limited. The bird is the corn is no good connection,
his bird is low. But it's possible. It's through this
very patchy network access from the crowded benches of Havana's
parks that the Internet is just starting to change the
way Cubans live and work, decades after it's transformed our
(01:59):
lives lives in the developed world. Hi am Akito, and
I'm Pat Cary, and this week on Decrypted, we're going
to be asking you to imagine a time before we
hailed Uber's, before we asked Sirie for directions, before we
(02:22):
got to watch our favorite movies with just a couple
of taps or clicks. As I traveled around, I asked
people to tell me their stories. I really wanted to
understand what the internet could do for young people and
especially for people trying to set up their own businesses Cuba.
(02:50):
Maybe just a short flight from the US, but it's
actually really unlike anywhere I had been before. Okay, so
I've heard that it's an idyllic island, vegetation long, pristine beaches.
I've always wanted to visit. Yeah, Havana is like full
of gritty charm. Um. It was a wonderful place to be.
(03:10):
But actually, the thing that really struck me as soon
as I arrived is how different the economy is from
what I'm used to in the US. A couple of examples, Um,
government wages are really incredibly low, just twenty five dollars
a month, and that's in the cities. In the countryside,
it's only fourteen dollars a month. Another thing I noticed
(03:31):
is that access to information is controlled in interesting ways,
so it's not often as easy as you would think
to access news, for example, about the rest of the world.
And before I arrived, I had heard about how there's
(03:52):
a shortage of cars in Cuba, but I just didn't
understand until I got there, really how limited access to
a vehicle is is. In fact, in the countryside, most
people move around by horse and cart because there's so
few cars. Sophia, you getting driven around in that pink
Cadillac by your very own driver, Romerrow. That's a pretty
(04:12):
big luxury. Yeah, that's a treat. And it's not like
cars are technically banned in Cuba. It's just that they
are so expensive to buy that most people can't afford them.
One taxi driver told me those classic cars that you
see in all the photos driving down the Malican, they
can cost as much as fifty thousand U S. Dollars.
(04:33):
And remember, most people are just earning twenty dollars a month.
And he said that if you do manage to somehow
save enough cash to buy one of these cars, then
the authorities can often get suspicious about how you manage
to get so much money. And there's no such thing
as getting a loan for a car if you want
to buy one. In the airport in Mexico on our
(04:54):
way to Cuba, we saw people checking in flat screen TVs,
air conditioning units, and are the large home electronics. Big
ticket items are still prohibitively expensive for most people in Cuba.
So what about smartphones? Actually, interestingly a lot of young
people do have smartphones, but again they are still really expensive.
(05:15):
A few people told me the latest models aren't easily
available unless you buy them on the black market. This
is something I asked Omero, our taxi driver about. Now. Remember,
by Cuban standards, Omero is very well off. He owns
five classic cars in a place where most people don't
even have one. But still he had to depend on
(05:37):
his relatives in Miami to send him a smartphone from
the US. No, I my phone is and buy in Miami. Okay,
every ELECTRONI is a spencer in Cuba. It's very spencive.
He's positive because my family living in Miami, Like, I'm
gonna buy the phone and the TV for me. You know.
(05:58):
The people is not possibly um Miami, because I know Miami.
No resize there. They gone to Marino how the morning
for goo. The made the flight and like a lot
of other developing economies, I assume a desktop computer is
completely out of the question. Yeah. I didn't see a
(06:19):
single one while I was there. And actually until now,
Cubans have not been able to access the Internet from
their homes. Interestingly, that may be about to change. I
spoke to one Cuba trade expert. His name is Timothy Ashby.
I'm the former senior Republican political appointee in the Commerce Department.
Myself and two administrations. Timothy told me there are pilot
(06:43):
programs underway in Havana to bring internet connections to at
least one neighborhood. The Cubans have just started experimenting with
home internet access UM in Old Havada, which is the
recently restored area of the five d year old General
and they have a pilot puggle with two thousand homes
(07:04):
that have been set up for home internet access, which
is a quite revolutionary in Cuba, which because home internet
access was prohibited until quite repas unless you were a
government official or a teacher or a foreuner. So that's
that's quadramatic. Can they do plan to Experiand he also
said there's a lot of interest inside the Cuban government
(07:24):
in developing the country's infrastructure in the coming years, and
a couple of American companies are definitely interested in helping
build out that infrastructure. Google is one of them, and
in December they reached a deal with Cuba. They're going
to set up service locally on the island to store
content like popular YouTube videos for example. At the start
(07:45):
of the show, we heard Omero talking about those frustratingly
slow internet connections. Well, this deal with Google should speed
things up. And you found the Airbnb is also growing
in Cuba, and wireless carriers like Verizon in eighteen he
are now offering roaming services for tourists visiting the island,
and I'm told that US carriers are looking for ways
(08:07):
to offer services not just to tourists but also to
local Cubans. Netflix is another US company that's technically available
in Cuba, but they won't really see the benefits of
being there until the Internet becomes more accessible to more people.
And this is this is an interesting thing thinking about
why US companies are even bothering to come here. Because
(08:30):
Cuba is a tiny economy, the revenue that they generate
can't really compare to the opportunity in other markets like
China or Greater Africa. Yeah. I wondered about this too,
and I suspect part of it must be related to
the fact that they are finally able to do business
in this place that's been off limits for literally decades.
(08:51):
But I discovered something else to Cuba actually trains a
lot of world class computer scientists and programmers. That's because
they have a few very respect table technical universities and
it's kind of a surprising detail. I think for a
lot of our listeners, because so far we've been talking
about Cuba, is this incredibly poor economy. Right, most people
(09:11):
have very little disposable income. But the government has invested
in good schools, good hospitals, and good universities. Sure, so
they have all the raw ingredients for for good talent.
But these people, they come out of these great educations
and they have nowhere to apply those skills. Right, And
when I spoke to Timothy, he said that for American
(09:31):
companies it may not be so much the market opportunity
as the engineering talent that they're chasing in Cuba. The
Cuban government is on board with this too. Their goal
is not to be another India, but to be something
closer to Israel, where they have highly trained innovative um
software developers and other types of entrepreneurs. And the entrepreneurial
(09:54):
sector has actually been encouraged in Cuba. Yeah, Okay, so
that's all on the pipeline. And yet right now most
people still need to sit on a park bench to
check their email. So let's walk everyone through it. How
do people actually connect to the internet. So first you
(10:15):
have to buy a scratch card to connect to the
national WiFi network. You can buy the cards at state
run general stores and in major hotels, so like phone
cards way back in the day. Yeah, no, exactly. And
the going rate for an hour online is about two
U S dollars. Now that's incredible. You know, earlier we
talked about people's salaries being twenty five dollars a month,
(10:38):
So an entire month's wages is equivalent to about ten
to twelve hours of time on the internet. Yeah, Cuba's
internet is one of the most expensive in the world.
I talked to a woman called Laurie. She works as
a guide in a national park in a town called Vignalis.
It's about three hours away from Havana. Here's how she
explained it. But it's not easy. It's sometimes we don't
(11:01):
have a connection and is just in the one blope
of the town and in some hotels we have only
to hold us. The early have senior too, but not
in all Vignal. It's not in the house. It's impossible
in the house, and even if we want the internet
in the house is really expensive and they don't want
people with internet because we use internet. We have acted
(11:25):
at all the information and they don't want that now.
When she says they, Laurie is of course talking about
the Cuban government. But it was almost as if Cuba's
method of information control was to make it so expensive
and so slow and in convenient to use the Internet.
I checked it out while I was there, and interestingly,
(11:48):
you can access Western websites like Facebook and Twitter. They're
not censored, so very different from a place like China.
Exactly here's him again. Cubans also communicate now um by
linked In. They are active Facebook subscribers. They also access
international news, and this is something that's very intriguing to
that they are not censored, that the government will close
(12:10):
down violently antique Castro government types of science. But I've
actually tested, as you may well have too, such just
like Google, see you and I can access news from
anywhere in the world. That seems there's no independent media
in Cuba, but there is an ability to access um
foreign media, which I think is a very key differentiation.
(12:32):
Did you get this sense of what people use the
internet for? Yeah, Well, since it's so new, people are
just getting used to it. They use mostly basic applications,
things like sending emails and video calling their relatives. Who
live outside Cuba. Another thing people mentioned was social networks
Google Facebook. Interestingly, I didn't hear anyone really talk about
(12:54):
e commerce, so that there's no Amazon there, no no
one recognized the name Amazon when I tried it out.
The only person who said they occasionally buy things online
was Omero, the taxi driver we mentioned before. He said
he uses eBay to get spare parts for his car. Okay, so,
(13:18):
just until a few years ago, it was really hard
for normal people to start a business. You either had
a government job, you served in the military, or you
worked the land as a farmer. There were some limited
opportunities to run your own business. You could maybe be
a hairdresser or rent a room to tourists, for example,
(13:38):
But before Raoul Castro changed the rules, you couldn't have
any employees unless they were related to you. And it's
really striking in Cuba how little industry there is. Towns
have no shops, literally no shops, and almost everything is
still run by the government, even restaurants and cinemas. But
(14:01):
it has recently become possible for Cubans to set up
small businesses, which usually have something to do with serving tourists.
So if you have a car. You might become a
taxi driver like a marrow, or you might make small
craft objects like painted pictures or jewelry out of everyday materials.
Here's Laurie again. You can compare our business now then
(14:27):
um some years ago, and now we have more opportunities
and we have more money. And it's incribll because all
the people are common before of the American people. So
when they came, the hotel is full and they have
to go at the houses with trendrom or sometimes they
don't like the hotel because it is um a little
(14:49):
bit um different in the house. They want came to
know the real people. They want to came to see
our life and to know about our culture. So so
it's Laurie said. Most towns just have one or two
government hotels, and as a result, there's a real shortage
of hotel rooms. Luckily, renting rooms to tourists is by
(15:11):
far the most lucrative kind of business people could run
in Cuba, but until now hosts have had to rely
on word of mouth to attract guests. They depend on
host families in other towns recommending them on to travelers,
or they hang signs in front of their doors. So
this is one area where the Internet is totally transforming
(15:33):
the way people do business. You know, it's really hard
to imagine how businesses could manage without being able to
do simple things like sending up a website. Yeah, I
was very curious about this too, and some of the
most interesting stories I heard came from the families that
we stayed with that She and her husband, Yovanni, have
(15:58):
a home in the north of Cuba. Their cottage sits
on a sandy spit of land poking out into the
Gulf of Mexico, surrounded by warm turquoise water and narrow
white beaches, and their home is idyllic. They have a
small garden in the shade of an avocado tree. They
grow fruit and salad. The chickens out back, and about
(16:20):
eighteen months ago they started renting three extra rooms. They
set up a website, and then about a month ago
they signed up with Airbnb. With Airbnb, it's only been
twenty days more or less of them, it's going very well.
They send us a lot of bookings. Basically, I'm booked
for the whole year with them. It's not just Island.
(16:43):
Everywhere we stayed our host families told us, Airbnb has
had a big impact on their business. Your friend recommended
Airbnb to me and I searched for it on the
internet and it looked good for growing my business. We
got our first client through them under member nine that
was great who hosted us in a little sky blue
(17:07):
cavania in Vignalis. Now, before Airbnb, you would never know
when a guest would come looking for a place to
stay before your friends and neighbors would give you a call,
ask if you were free or if you had guests
right now, and then sometimes people would say they're coming
and then not show up. On those days, hosts would
(17:29):
simply lose the income. And Ailem told me that knowing
her security deposit is guaranteed is one of the best
things about signing up with Airbnb. Well before, it was
a bit difficult. My house was not very well known.
A lot of clients would reserve, but without the security
that they're definitely coming and if they don't show up,
(17:50):
sometimes I would send away other guests and not get
the money from any of them. So I started only
to accept day of booking. Another big bonus with Airbnb
is that posts can take bookings far in advance on
the night we stayed with Alem, we saw her actually
take a reservation as far out as April, as she
says that never used to happen before. Okay, so I
(18:12):
lem not having easy access to the internet. How is
she maintaining her Airbnb account? Yeah, you're right. She doesn't
have any internet signal at her house and she lives
an hour away from the closest WiFi hotspot, which is
in the town, so she can't manage her own Airbnb accounts.
Someone actually called her that night to update her about
the booking, and what she told me is that usually
(18:35):
Airbnb will keep in touch with her by email, so
a couple of times a week or whenever she goes
into the town, she can get online and pick up
any updates that they've sent her. Here in Cuba, we
are not free to connect to the internet from home
as well. It's very difficult. I have an email account
and that's how I keep in touch with Airbnb. This
(18:56):
is the way I connect with Airbnb. They connect with
every one this way and they do everything. They upload
the photos of the house. When I have new photos,
I send them to a representative who is based in
Havana and he has to communicate with the guests because
I don't have access to the internet. That representative I
LM is talking about. Those are people working for Airbnb
(19:18):
and Havana. It's their job to basically manage the hosts
accounts for them. Yeah, and I didn't really get it
at the time, but now that I'm thinking back, when
I was looking for places to stay in Cuba, almost
every listing offered instant booking. And you know, maybe that's
the reason that because it's just too hard for hosts
to get back to you quickly if you try and
(19:38):
message them and asking questions before you make a reservation.
So what do you think we can expect from Cuba
in the next few years. I think everyone is waiting
to see US companies, I mean international companies in general
are all eager to get into the country. But so far,
the pace of dealmaking, at least between US companies and
the Cuban government has been relatively slow. Um and there's
(20:01):
a number of pending deals that haven't closed yet. One
thing that we can count on is that the Cuban
government is interested in expanding internet access within the country,
so likely the first thing we'll see is more WiFi
hotspots and hopefully something cheaper to something cheaper than two
dollars an hour. Yeah, well, I mean, O'Mara told me
that it used to be ten a couple of years ago,
(20:22):
ten dollars an hour, So it may come down further,
and it'll be interesting to see what happens to the
relationship that the US has with Cuba under our new
president Donald Trump. I agree, I think that's a big
question mark right now. But I was interested while I
(20:43):
was reporting out this story to hear that a lot
of people are actually very hopeful the Cuban government um
is not expecting any kind of rollback what I've heard,
especially from Timothy, who is still very plugged in with
policy officials in Washington. He said that there may be
more scrutiny of deals, there may be more enforcement of
existing regulations on the U S side, but he's not
(21:04):
expecting to see a rollback. We'll just have to wait
and see. And that's it for this week's episode of Decrypted.
Thanks for listening. Tell us what you thought of this episode.
Send us a voice message. You can email me at
(21:24):
p G A D K A r I at Bloomberg
dot net, or write to me on Twitter. I'm at
Pa Gadkari and I'm at aki Ito seven. You can
subscribe to Decrypted on iTunes or wherever you get your podcasts,
and leave us a rating and a review. It helps
more listeners find your show. This episode was produced by
(21:47):
aki Ito, Magnus Henrickson, and Liz Smith. Alec McCabe is
head of Bloomberg Podcasts. We'll see you next week as
Radio Rubber Last. L
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