Officials hint at possible win for Uber in Mexico City

AP News
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Posted: Jun 29, 2015 12:31 AM
Officials hint at possible win for Uber in Mexico City

MEXICO CITY (AP) — Times are tough for Uber in many parts of the world, from a recent California ruling that its drivers cannot be classified as contractors to a Paris taxi protest that became a riot and led France's president to promise a crackdown.

But the smartphone-based ridesharing app may soon get some good news in Mexico City.

Ahead of a city government decision on its future, Uber recently got a ringing, though nonbinding, endorsement from the influential Federal Commission on Economic Competition. Even Mexico City's Human Rights Commission has weighed in favoring the service.

While Uber has faced legal hurdles that forced it off the road in some places, officials have signaled it may be allowed to remain in this megalopolis of 20 million-plus inhabitants.

"Generally speaking, the more options consumers have, the better off they are," competition commission chairwoman Alejandra Palacios Prieto told The Associated Press. "They will receive better services and pay better prices for those services."

That's not to say it hasn't been a bumpy road.

Licensed cabbies have staged protests demanding authorities arrest Uber drivers and seize their cars. Some vowed to "hunt down" Uber vehicles and in one case cabbies bashed doors and a windshield with baseball bats while a terrified client sat inside. A large taxi union has vowed not to obey cab regulations if Uber isn't required to do the same.

Legal approval would amount to recognition that despite complaints of unfair competition, app-based services like Uber and the smaller Cabify have become widely popular here, in part because much old-school cab service is terrible.

Mexico City street cabs were once practically synonymous with assaults and kidnappings, and it seemed everyone had at least one taxi-related tale of woe. The green-and-white Volkswagen Beetle taxis with the front passenger seats removed made it easy for armed accomplices to hop aboard and rob trapped passengers.

The city has since improved licensing enforcement and decommissioned old-model cabs. Today, the Beetles known locally as "vochos" are extinct, and cab crime has fallen somewhat, according to official statistics.

But it's hard to shake taxis' ignoble place in the popular imagination. It's also still common to hail a street cab only to find beer cans rattling in the back, a driver unwilling to go anywhere he considers inconvenient, blaring music he won't turn down, and a cigarette-and-sweat stench that sticks to your clothing.

"Honestly it's frightful," said Hugo Castellon, a financial worker who uses Uber up to 10 times a week. With traditional cabs, "the service is terrible — so many bad experiences."

Contrast that with the fresh-smelling sedan driven by Cesar Hernandez, a clean-cut Uber driver who opens the door for customers and uses the polite "usted" form of address. He washes the car every two days, scrubbing the exterior and brushing the upholstery.

"You should feel comfortable, no?" said Hernandez. "We try to make the car feel like it belongs to the customer. ... Have a seat, put on the music you like and, if you want, we can turn on the air conditioning."

Uber's dynamic pricing system results in fares generally higher than street taxis, but competitive with local radio and base cabs that usually offer decent service. There are also at least two apps, Easy Taxi and Yaxi, which summon licensed cabs.

Incidents elsewhere have raised security concerns about Uber — sexual harassment complaints in the U.S., a customer raped in India. But it's widely seen as the safe option in Mexico, where people of all classes worry about being abducted.

The sense of safety comes from having the name and license number of drivers who undergo background checks. Many families send Uber cars to pick up their kids, then monitor the app to ensure they stay on course. Parents who restricted teens from going out at night now say it's OK if they use Uber.

"In my case, as a woman, I think we demand more security and respect," said Bethzabe Zavala Martinez, an occasional rideshare user. "I'm afraid to take just any old taxi."

City prosecutors say at least two rapes are reported in cabs each month. Taxi union officials contend most violent crimes occur in the estimated tens of thousands of unlicensed and illegal "pirate" taxis.

Cabbies are also robbery targets, and Uber drivers feel safer with a record of their clients' identities and knowing they're affluent enough to have a credit card and smartphone. Plus, drivers don't have to carry cash because payments are made electronically.

Mexico City's Transportation Department says a decision is expected around month's end that favors "modernity and the experience of travel." At least some regulation seems likely, and Mayor Miguel Angel Mancera said Saturday that talks with cabbies aim to support them and level the playing field.

But the drivers vow lawsuits and further protests if they don't like the outcome.

The Organized Taxi Drivers of Mexico City contend they're losing up to 24 million pesos ($1.5 million) a day and it's unfair that Uber and Cabify drivers avoid costly licensing and inspections. They say the government fixes fares artificially low for "political" reasons and they need to charge more if people want better cabs.

"Mexican law is very clear and it defines this as a crime, as an illegal provision of a service," union spokesman Daniel Medina said. "For us, Uber and Cabify are nothing but criminals."

Taxi protests have done little to sway public opinion. When cabbies recently snarled a major thoroughfare, Uber offered users free rides and reported an 800 percent spike in downloads.

The company says greater Mexico City is its 10th largest market worldwide with 300,000 users, just two years after launching. It also operates in Guadalajara, Monterey, Queretaro and Tijuana, with plans to expand to Puebla.

"Obviously technology is moving forward," Uber spokesman Luis de Uriarte said, "and what the law needs to do is adjust and accommodate all those advances that benefit the people."

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Peter Orsi on Twitter: www.twitter.com/Peter_Orsi