In Mexico there are two ways of letting people know that something isn’t working properly.
No sirve, from the verb servir, literally means “it doesn’t serve,” or properly translated “it’s no use.” No funciona, means it’s not functioning, or is out of order.
Often in Mexico people will say — or scrawl on a piece of card — no sirve, when they probably ought to say or write no funciona—for example when a soft-drinks machine is taking money but not dropping the cans into the hatch, or a ticket-dispensing machine says it gives change but doesn’t, or an ATM asks you to try again later.
But when it comes down to it, if it’s out of order then it’s no use—at least for the purpose at hand.
No funciona is also the same as no sirve if what doesn’t work is the proposed solution to a problem, because if it doesn’t work now, it won’t ever.
So, with some possible exceptions, no funciona and no sirve are more or less interchangeable, and the difference is either academic, or depends on how you want to look at it.
Mexicans aren’t particularly fussy about such grammatical minutiae, and
generally don’t waste time on it, unless there’s a practical reason for bothering, like the legislator who vehemently denied being asleep during the debates. I was not asleep — dormido— but sleeping — durmiendo — the offended representative clarified.
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