I know this is a bit confusing but have you ever wonder why are there taxis with names on top in some streets?
I noticed that not many articles are written about them and let alone in English. Even worse, most articles pointing at this “colectivo” topic refer to the Argentinian meaning of the word (bus) which will be really confusing if you use that meaning in Chile despite our geographic proximity.
Then what does colectivo mean in Chile? The official name is “taxi colectivo” and it’s basically a sedan car that does a fixed route and takes passenger within it for a standard fee (colectivos are legal and follow regulations, belong to a route, are black, always have a sign on top, fees must be visible, etc). It’s kind of like taking a bus with the confort of a cab.
Now why do they exist? Even people in Chile don’t know but using regular cars as a fixed route transportation system was common in many countries but in Chile this use was preserved along with regular buses and taxis. Apparently they still exist in Bolivia (trufi) and Ecuador (taxi de ruta fija) as well.
Almost every Chilean city has colectivos, however, they are more popular outside Santiago and even more in small towns. Several small towns don’t have a bus service so locals rely on colectivos. Colectivos are inherently urban services unlike many other small private services you see in other parts of the world but there’s a variant of colectivos that you won’t get to see much in Santiago which is the yellow colectivo and these do rural routes.
There are two big advantages and one strong issue with colectivos:
The first one is confort. Average people won’t use taxis as much in Santiago because they are expensive and don’t have a good reputation (as it’s almost anywhere?) but colectivos give you this confort without breaking the bank.
The second one is convenience. If you’re only four passengers (at worst) chances are you’ll get to your destination faster than on a bus. Also, your driver might ask you where you go to take a shortcut. You can also buy the other seats that are still empty if you want to get faster.
The issue is city planning/space. Some transport experts dislike colectivos and Transantiago/Red does not consider them so when you use a colectivo you can’t use your bip! card to pay, just cash.
In Santiago, colectivos are alive and well. There are two kinds of routes: Long routes for people who want confort (for instance services that go from downtown to farther communes like Puente Alto, Vitacura or Maipú) and short routes that bring people closer to metro stations, malls, etc.