Gringo Price Exacts Toll on Latin America’s Reputation

A few years ago I took a cab across one of the world’s biggest cities on a very rainy day. As luck would have it, I didn’t have the correct currency denominations to pay the exact fare. Just a few of the larger denominations that vastly exceeded the amount that appeared on the cabby’s meter.

Do you have change, I asked. Alas, he said he did not. In deciding between arguing with the cabby or moving on with the rest of my life, I chose the latter.

Where did this happen? New York City.

Unfortunately, the Big Apple isn’t the only place with opportunistic cabbies. I’ve noticed that the cabbies in Costa Rica and Mexico also often seem to be short on bills in small denominations too.

Long Ride Home. Another twist on this scenario is the ride home. In both Costa Rica and Mexico the return trip from an outlying tourist attraction as darkness falls usually costs about 10-20 percent than I paid to get there.

The difference between Latin American countries and New York, though, is that gringo travelers are often already feeling even more paranoid about being taken advantage of.

Specifically, they’re worried about paying the “gringo price,” which is basically an inflated price for a good or service that is only applicable to foreign visitors.

In most instances, the gringo price seems fairly innocuous. I first noticed it in Costa Rica when I ate at a tourist haunt after eating for a few straight days at restaurants that served mostly locals. The establishments that cater to tourists often have menus in English and prices in dollars. I noticed that many times the amount they charge for food is about a third higher than what locals pay for the same meal at a restaurant down the street.

Two Prices, One Restaurant. There can even be two prices in the same restaurant. Someone told me once that she dined at a restaurant in El Salvador that had two different sets of prices. One for gringos and another for locals.

Paying the “gringo price” doesn’t really bother me. Usually, the exchange rate is good so my out-of-pocket expense for the extra charge is pretty minimal. The 20 extra pesos my family had to pay to get back from the water park in the outskirts of Puerto Vallarta came out to less than $2. (I whispered this to my wife who was fuming about the inflated return-trip price in the back seat). Plus, I know most of the people I’m dealing with can probably use some extra money.

To be sure, the idea of charging someone based on their nation of origin wouldn’t fly in the U.S. and several other countries throughout the world.

But Latin American countries are not the same as the U.S. For one thing, the income gap is even larger between the rich and the poor.

Discrimination. People say being charged the gringo price makes them feel they’re being discriminated against. But treating people differently based on how much money they make is one of few legal forms of discrimination there is. If it were so unfair, the income tax would have been abolished long ago.

Ultimately, the sad truth is that the “gringo price” erodes people’s confidence in Latin America. People more sensitive than I am on this issue are thinking: Why worry about paying more because of where I come from when I can go to places like Canada or Europe without having worrying about whether I’m being treated fairly? Of course, they’ll likely pay more than they would in Mexico or Costa Rica. But so will everyone else.

Photo by Saad.Akhtar