Mexico City - Ride-hailing service Uber is open to being regulated in Mexico City, as the rapidly growing start-up seeks to cement its expansion in one of the largest cities in the Americas.
Uber entered Mexico City in 2013 and says it has grown to around 300 000 users. But just as in many other cities across the world, the controversial cellphone app has upset Mexico City taxi organisations, who say the service is illegal and have protested in the streets.
In response, Mexico City's government is holding round-tables on how best to regulate apps such as Uber and Cabify, which say they are private car services rather than taxis.
On Wednesday, Ana Paula Blanco, Uber's head of communications for Latin America, said the company had no problem with greater oversight in Mexico City, which has 140 000 registered taxis.
“Any regulation needs to take into account four things: social benefits, economic benefits, that we're considered a new type of transport in the city and that it doesn't stop innovation,” she said.
Taxi driver union leaders at the round-table said apps such as Uber were breaking the law, and were upset because Uber drivers paid less in city fees and insurance.
But Mexico City transport secretary Rufino Leon said ride-sharing apps were not illegal.
“They make private contracts with private individuals,” he said, “providing services that do not fall under the description of taxis.”
Uber has expanded rapidly to more than 50 countries around the world but its speedy growth has led it into fierce confrontations with taxi companies and regulators.
CALIFORNIA SAYS UBER DRIVERS ARE EMPLOYEES
Meanwhile, a California panel has ruled that an Uber driver is an employee - a decision with potentially major implications for a business that relies on independent contractors.
The state labour commission ordered Uber to reimburse one of its drivers, Barbara Ann Berwick, more than $4000 (R48 760) for employee expenses in respect of tolls and and other expenses incurred while driving.
State hearing officer Stephanie Barrett wrote that while Uber claims to be a "neutral technological platform" for independent drivers, it sets most of the terms of employment.
Uber and its management team are "involved in every aspect of the operation," including vetting prospective drivers and terminating them if their rating levels are low, she wrote.
Because of this, Barrett ruled, Uber must "indemnify an employee for all that the employee necessarily expends in the discharge of the employee's duties."
Uber has appealed the ruling in the California Superior Court in San Francisco, saying that in any case it applies only to Berwick.
“The ruling is non-binding and applies to a single driver," the company said. "Indeed it is contrary to a previous ruling by the same commission.
“Five other states have also come to the same conclusion."
The company added that "the number one reason drivers choose to use Uber is because they have complete flexibility and control."
It noted that most drivers "can and do choose to earn their living from multiple sources, including other ride-sharing companies."
But if the case ends up applying to Uber's global operations, it could potentially take away one of the underpinnings of its business model, which considers drivers independent contractors.
If all drivers are classified as employees, it could require Uber to pay hefty amounts for social security, workers' compensation and other charges - inevitably pushing up user prices.
Reuters, AFP