RIO DE JANEIRO (Reuters) - The mayor of Rio de Janeiro said on Tuesday he would ban the use of ride-hailing app Uber in the city, but left the door open to possible regulation of the service in the future.
The decision comes as major cities across Brazil struggle to come to grips with the app and the impact it is having on local taxi drivers.
Mayor Eduardo Paes had until Tuesday to sign a law passed by the city council last month.
"Uber is banned," he told a press conference in Rio de Janeiro. Un-licensed drivers will face a fine of up to 2000 reais ($493).
But the mayor, who presents himself as a technology fan and wears an Apple watch, said he was open to discussing with Uber Technologies Inc how it might be legalized and regulated.
Uber officials in Brazil could not immediately be reached for comment. The service has triggered protests by taxi drivers from London to New Delhi as it upends traditional business models that require professional drivers to pay steep licensing fees to drive cabs. In July thousands of taxi drivers protested in Rio, blocking main roads during rush hour.
Uber has argued that banning the app in Rio is a move against customer choice and mobility in a city known for traffic jams and rude taxi drivers. An Uber campaign resulted in 700,000 emails being sent to City Hall to veto the law.
The company has also suggested Brazil introduce a system by which Uber drivers pay a fee into a regional fund to improve public transport. Such a scheme is being introduced in Mexico.
But the taxi lobby is strong in Rio and the law was passed by an overwhelming majority in the city council.
Paes said City Hall would look to develop an app of its own to allow users to rate the service of taxi drivers, one of the main advantages Uber users cite over local cabs.
A photo of Paes driving a taxi was splashed across the front page of Rio's main daily, O Globo, on Tuesday. The mayor drove the cab on Sunday to get frank views from residents about the state of the city. When asked why he wasn't driving an Uber, the mayor replied "I can't drive an Uber, it's illegal."
($1 = 4.06 Brazilian reais)
(Reporting by Rodrigo Viga Gaier, writing by Stephen Eisenhammer; Editing by Christian Plumb)