Uber fights proposed rule in Mexico's Cancun barring cash fares
By Noe Torres and Julia Love
MEXICO CITY (Reuters) – Uber Technologies Inc, which has been facing a wave of regulations in Latin America, is fighting proposed rules in Cancun that the ride-hailing service says could drive it out of the top Mexican beach resort.
Legislators in Quintana Roo, the southeastern state that includes Cancun, are considering a proposal that would bar drivers from accepting cash and set minimum value and age criteria for the cars used for trips.
Accepting cash from users is often seen as making drivers robbery targets.
Federico Ranero, general manager for Uber in Mexico, said the law would have grave implications for the company’s operations in the tourist destination, where 40 percent of trips are paid for in cash.
“This regulation, if it is passed as it is, would so limit the service and so drastically affect the experience of our users and driver-partners that Uber would feel obligated to suspend its operations in the state of Quintana Roo,” Ranero said in an interview.
Fernando Zelaya, president of the state legislature’s transportation commission and one of the lawmakers who presented the initiative, could not be reached for comment. But his staff said legislators could discuss it as soon as this week.
Last month, lawmakers in the central Mexican state of Puebla approved new rules aimed at stricter vetting and monitoring of ride-share drivers working for companies like Uber and Cabify after the recent murders of two female college students.
Senators in Brazil scrapped parts of a bill last month that would have treated ride-hailing companies like traditional taxi services after a lobbying effort by Uber that included a trip there by new Chief Executive Officer Dara Khosrowshahi.
By specifying the value and age of drivers’ cars, the regulation in Quintana Roo is among the more onerous in Mexico, said Carlos Martinez, who heads the Center for Citizens and Consumers, a group that has studied the proposals.
“You have here a clear barrier to entry in the market,” he said.
Ranero warned that tourism in Cancun, a relatively small but growing market for Uber, could take a hit if the company leaves.
“The tourists trust Uber,” he said.
Cash payments have proved to be a thorny issue for Uber as it pursues growth in emerging markets where many consumers do not have credit cards. After a wave of attacks on drivers in Brazil, Uber began using social security numbers to verify the identity of riders who pay with cash.
After testing various methods in Mexico, Uber has been authenticating such riders through their Facebook (NASDAQ:) profiles, Ranero said.
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