Dan Pierson Fun, startups, #collcons, travel

If you thought this post was going to be about our president-elect, I’m sorry to disappoint. We’re here to talk about coins, as in the clinky things you get when you buy something and hand over just a tad bit more money than the purchase price.

While world leaders meet to discuss financial bailouts and impending economic collapse, in my part of the world, we’re much more concerned with a steadily shrinking supply of one peso coins.

Here’s the root cause of the problem: Buenos Aires is almost entirely dependent on its “Colectivo” system of buses.

Props to Marina Vilte for the photo

These things are everywhere. There are about 150 different lines, and the most popular routes run at a frequency of about one bus every two minutes during peak hours. So it’s pretty much an understatement to say that the residents of Buenos Aires completely depend on them.

These buses cost in the area of around 90 centavos (about 25 cents), and you could ride one clear from the south of BsAs all the way north; bring an Ipod, it’ll take you about 2 hours, and at some point you’ll probably end up sitting next to the ubiquitous “El Gordo” (every crew here has one friend referred to simply as “The Fat One”.)

So these buses are crucial to the continuing functionality of Buenos Aires, Argentina, and apparently therein lies the problem. Because colectivos run exclusively on these coins, the 50 centavo and 1 peso coins have become hot commodities. They’re literally being hoarded, and then sold on the black market for up to 6% over face value.

This has far-reaching implications, and effects virtually every transaction you make throughout the day. Waitresses demand that you pay your bill with exact change (apparently in extreme situations, they’ll forecefully open up your purse or wallet to make sure you’re not lying). Taxi drivers round down rather than giving coins. And small retailers actually refuse to make a sale when providing change will be required.

I find this interesting, because it really is all a matter of psychology (specifically, fear and groupthink). By all accounts, there are enough coins in Buenos Aires to make this a non-issue. But the fact that everyone has this idea promotes hoarding, to the point where it becomes institutional as profiteers seek to hold enough coins to further the problem. And I guess it just keeps steamrolling from there.

This was just a funny side note until today, when I needed to ride the bus across town to pick up the keys to my new apartment. I had no coins, and my smallest bill was a 2 peso note. I knew asking for change was out of the question, so I tried to buy a banana. No dice.

I went to another corner shop (this time a franchise-type, 711 deal), and picked up a pack of gum. Another head shaking no. At this point, my life had turned into a Seinfeld rerun.

In the end, I went into a larger retail store, and finally found someone kind enough to give me a couple of coins. All’s well that ends well, I suppose, and lesson learned: I’ll hold onto my change with a death grip.