July 15, 2015 / 10:35 PM / 4 years ago

Mexico City unveils first regulation on Uber in Latin America

MEXICO CITY (Reuters) - Mexico City’s government on Wednesday published new rules for ride hailing services like Uber [UBER.UL], including a 1.5 percent ride levy and a minimum vehicle value, the first regulation on the sector in Latin America.

The logo for Uber is shown on a vehicle in San Francisco, California May 7, 2015.REUTERS/Robert Galbraith

The city government said vehicles used by Uber and other services would have to cost at least 200,000 pesos ($12,674). That was 50,000 pesos less than in draft regulation seen by Reuters last week, but more than the company had hoped. Each Uber vehicle will also need a 1,599 peso yearly permit, a government transport official said.

Nevertheless, the rules did not impose a limit to the number of vehicles Uber could deploy around the city, which Mexico City had threatened to do in its preliminary proposals.

Uber said in a statement it welcomed the regulation. But the minimum car value could spell trouble for the San Francisco-based company, which said last week the start-up cost for drivers to use its most popular service was around 150,000 pesos including the cost of a car.

Earlier on Wednesday, the firm said the minimum value of 200,000 pesos had “no logical benefit” to the city.

The controversial ride-hailing service, which has been valued at over $40 billion, has come under increasing pressure from regulators in recent months in various parts of the world.

It opened in Mexico City in 2013. Uber says the metropolis is one of its fastest-growing markets globally with 500,000 customers and over 10,000 drivers, some of whom share cars.

Mexico City was the largest city in the world to regulate ride-hailing apps, Uber said.

Local taxi drivers were disappointed the rules were not tougher. They will protest the move and could go on strike, said Ruben Alcantara, a union leader, who criticized the government for a “lack of respect” towards taxis.

“We didn’t expect the city’s government to react so violently towards us,” he said.

Editing by Dave Graham and Cynthia Osterman

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