Mexico City Shows The World The Way Forward With Uber

Mexico City Shows The World The Way Forward With Uber

Uber_RideUber, valued at $40 billion, has taken the ride industry by storm, with cities and industries scuffling to figure out how to exactly handle this new innovation. It has been a spirited reply to Uber, with some loving the service and others hating it. In Mexico, just as everywhere else in the world, government, taxi services, workers and passengers are all making the adjustment to the new possibility. 

One such party that hates the new service are Taxi drivers. In Mexico City they have protested for four months the ride-sharing service Uber. Last week, Mexico City became the first city in Latin America to regulate ride-sharing apps. The government issued a list of rules for Uber drivers on Wednesday, July 15, such as a 1.5 percent tax, a yearly permit fee and a minimum vehicle value.

The 1.5% levy is meant to generate revenue and create a Fund for Taxis, Transportation and Pedestrians.  Drivers have two weeks remaining to pay Mex $4,617.50 (US$290) to register with the capital’s Transport Secretary.

Vehicles must have an original value of no less than MEX $200,000 (USD $12,650), four doors, air bags, radio, air-conditioning system and seat belts for all passengers. Drivers must also pay MEX $1,599 (nearly US $101) for an annual permit on each vehicle used for this service.

Uber_Mexico_City

Uber likes the decision. Mexico City’s Uber representatives said the new regulation “makes Mexico a pioneer in recognizing, in law, that supply should respond directly to demand and the free choice of consumers.”

However, local taxi drivers believe rules for ride-sharing apps should be more stringent, with Union leader Rubén Alcántara contending the rules demonstrate a “lack of respect” towards Taxi drivers and that they plan to go on strike.  The base fee for Uber in Mexico City is currently $7.25, with $2 charged per minute, and $3.50 per kilometer. (July 2015)

According to Corey Owens, Uber’s pubic policy directory, the levy is on the “high end” compared to what it pays in other cities, which includes a 1 percent charge in Washington D.C.  Mexico City represents the largest city in the world now regulating Uber, and has 140,000 traditional taxis.

South Korea has not made a decision on how it might regulate Uber, having asked the company to stop operating until Uber-specific legislation and regulations can be drafted. Uber has itself chosen to stop operating in places like Panama City Beach, Florida due to pressure by unwelcoming city officials and climates.

In other places the service remains online, such as in South Africa where police impounded 34 Uber vehicles for illegal operations.  In Germany ride-sharing services are totally banned unless they get a taxi license. Uber plans to buy the commercial licenses for its driver.  In California, the California’s Labor Commissioner’s Office decided that one of Uber’s drivers should be defined as an employee of the company and not an independent contractor.

“This ruling—if it stands—could force Uber out of California,” James Sherk,  senior policy analyst in labor economics from The Heritage Foundation, told . “Uber drivers use their own vehicles, set their own hours and are free to work for competitors like Lyft at the same time. Under federal law that makes them independent contractors.”

Uber has appealed. In five other states it won this same case, though California law does state that employers must reimburse employees for business-related expenses. Should the company lose, minimum wage and overtime would be demanded along with employee benefits. Uber would also have to control its driver’s schedule. “It destroys Uber’s business model,” Sherk said. “I would expect them to leave California rather than comply.”

In the US, and around the world, Uber is being seen as a TNC or a transporation network company, which merely connects passengers and drivers via software. The term appeared in California when that state passed its first ride-sharing regulations in September 2013.  In Colorado, TNC’s must insure up to $1 million in liability insurance which Uber already covers.

WSJ_Chart

California wants to require the company to provide insurance whenever the driver has the application turned on. In Illinois’, ride-sharing laws passed in May 2014 demands TNC’s show a photo of a driver and fare estimate in the app and deliver an electronic receipt. Portland wants ride-sharing services to offer new services like wheelchair accessible vehicles.

Uber has pushed cities to pass laws in shorter periods of time in the new cities. In the 18 US cities where Uber is now legalized, 10 passed the ordinances in four months in cities like Seattle and Washington DC, where Uber has been in service for years.

There are options other than Uber in Mexico City, such as an app called YAXI, which works basically the same way as Uber. A YAXI driver, unlike an Uber driver, will likely take longer, since there are fewer of them.  Another option for a ride are, of course taxis. Sitio Niza is a reputable sitio de taxi which functions much like any other taxi in any other city.

All-in-all, it seems Mexico City has taken a liberal approach to the regulation of Uber now and potentially in the future. It offers, while potentially high fees, no bans or limits that could outright spell the end of the service in the city.

[Editor’s Note: Thinking about checking out Uber in Mexico City? Start planning by clicking here]

Share

About the Author

By Michael / Administrator

Follow michael
on Jul 20, 2015

Danish entrepreneur working out of Acapulco, Mexico. CEO @ WB Innovations LTD

Book Your Trip

Tips And News

Follow Us

Luis Fernando Domínguez Mora
Luis Fernando Domínguez Mora
01:09 19 Mar 14
I’ve been using Hoteles Acapulco web page for long time. I’ve checked it a few times against other pages and here it always gave me the best deal without any hidden costs that pop out in the last moment. Frankly speaking I haven’t tried to book a car with Hoteles Acapulco, I didn’t need to, but I have booked two different hotels and once a hotel and flight package. The three times I used the web page I was very satisfied. It is easy to follow, I’m not an internet geek and I didn’t have any problems with the booking and the whole booking process was pretty fast. Once I wanted to stay at Acapulco Playa Suites that I had already known but instead I chose a promotion they offered at that time at Acapulco Copacabana Hotel and I paid almost the same. I have already recommended their services to my friends and they were also happy with their vacation.
Morten Nyboe Bach
Morten Nyboe Bach
19:00 08 Mar 14
High Quality service, helping the customer instead of themselves, and very good prices as well compared with other sites. High praises from here!!
John Nyboe Bach
John Nyboe Bach
16:22 07 Mar 14
Great hotel prices and the staff was very helpfull!
Cris Garcia
Cris Garcia
15:41 07 Feb 15
Esta bien el hotel
Camelia Mendoza
Camelia Mendoza
17:35 29 Jun 13
Excelente promociones y muy buena servicio.
Jeremiah Gray
Jeremiah Gray
18:34 14 Sep 18
I booked a trip with flight and hotel included and it was very user friendly, was even able to modify my trip and add transportation. Nice to have it all under one roof. Email support always answered in a timely manor. Will use MexResorts for our next trip for sure.
Mark Brown
Mark Brown
13:34 13 Sep 18
My first time booking with MexResorts and everything went smooth. Staff was nice and their online system is great. Rates are competitive and I will definitely be using them again in the future.
Owen Bryant
Owen Bryant
19:42 14 Sep 18
Very competitive rates and a solid booking process. Was able to get set up with an all inclusive resort for our family trip to Cancun. Can definitely recommend MexResorts.
Daniel Wilson
Daniel Wilson
16:56 14 Sep 18
I booked a trip to Mexico with their online system and had no issues and when I had some questions regarding my booking phone support was super helpful!
Flavio Vangerbert
Flavio Vangerbert
04:05 13 Sep 18
I have booked with Mex Resorts a few times now and every time has been a breeze. Thumbs up to the phone support, always nice and helpful if any issue should arise.
See All Reviews