Latin America

Mexican capital becomes first Latin city to regulate Uber car-sharing

All rides will be subject to a 1.5-percent levy and drivers will have to pay an annual fee

Uber’s headquarters in San Francisco.
Uber’s headquarters in San Francisco.Eric Risberg (AP)

After weeks of negotiations, the Mexico City government has agreed on a legal framework to allow car-sharing services such as Uber and Cabify to operate in the Mexican capital.

Among other conditions, the pioneering agreement establishes the charging of a 1.5-percent levy on all rides, a $101 annual permit fee for drivers, and a minimal vehicle value.

The San Francisco-based Uber, which was created in 2009, said the fees were “high” but were “reasonable” enough to be acceptable.

The San Francisco-based Uber said the fees were “high” but “reasonable” enough to be acceptable

“As a result, Mexico’s capital – one of the most complex cities in the world – now has modern, forward-looking regulations echoing the principles of Uber’s business model: the logic of supply and demand alongside a citizen’s ability to choose how they move around their city,” the company said in a statement on Thursday.

Uber’s arrival in the Mexican capital, one of the world’s most populous cities, ignited massive protests by taxi drivers, who charged that the service was taking away their business. Violent incidents between taxi and Uber drivers took place at the international airport and several tourist attractions last October and earlier this year.

Nevertheless, Uber workers will still have to pay less than the $308 taxi drivers have to contribute for their annual circulation permit. The permit fees, including the 1.5-percent levy, will go to a new Mexico City fund designed to improve public mobility in the capital. 

Uber workers will still pay less than the $308 taxi drivers have to contribute for their annual permits

Uber drivers must use vehicles appraised at no less than $12,688 and they must be equipped with air conditioning and safety airbags, according to the agreement.

“This regulation will preserve Uber’s benefits for both riders and driver-partners, allowing citizens to choose safe and reliable transportation, and providing certainty to the thousands of driver-partners who have found an opportunity to earn a living with Uber,” the company said.

Uber began operations in Mexico City in 2013 and since then around 500,000 people have used its services. It now has about 10,000 private drivers in the city.

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There are around 140,000 taxis on the chaotic streets of the Mexican capital, but at the same time an unknown number of illegal “pirate” taxis are also in circulation.

The new rules do not impose a limit on the number of vehicles Uber can deploy around the city, which Mexico City had threatened to do in its preliminary proposals.

According to Reuters, taxi drivers in Mexico City are angry that the rules have not been made tougher. They plan to protest the move and could go on strike, said union leader Rubén Alcantará, who criticized the government for showing a “lack of respect” towards taxis.

Uber is also facing opposition in a number of other Latin American nations. In April, Brazil prohibited its operations and taxis owners in Colombia are calling on the government to ban its services there.

Taxi drivers in Mexico City are angry that the rules are not tougher and have threatened more protests

In France, Uber announced that it was shutting down its services after a string of violent protests erupted and two of its managers were jailed.

Last December, a judge in Spain ordered Uber to suspend all its transportation operations, but the company is continuing to operate as a food delivery service.

English version by Martin Delfin.

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