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Uber
Car-hailing service Uber has something to celebrate — and something to complain about.
A court in New Delhi, India, on Wednesday revoked a government ban on Uber’s service, saying that it should be allowed to operate in the city, if provided a license by regulators, Reuters is reporting, citing conversations with attorneys involved in the case. The bit of good news, however, came at the same time as a proposed regulation in Mexico City that could see Uber’s service pay licensing fees and other levies that it was previously not paying, according to Reuters.
Uber, which celebrated its fifth birthday last month, currently operates in over 300 cities around the world. The company allows users to hail a car and pay for it via a mobile app. Central to Uber’s efforts is connecting drivers and riders in countries around the world. But as the service has boomed in growth, it’s increasingly faced regulatory hurdles.
In December, for instance, Uber began operations in Portland, Oregon, even though city officials deemed the service illegal. Officials there said at the time that they were ready to issue civil and criminal penalties against the company and its drivers. Uber has also faced legal issues in Spain, where courts there say the company’s service is illegal. And Uber had all but one of its outposts in New York City temporarily shut down in January after failing to comply with regulations placed upon it by the municipality’s taxi commission.
Uber’s troubles have continued into 2015, as several governments, including those in Germany, France and other parts of Europe, have come down hard on Uber, arguing that its service may be acting illegally.
At the core of most arguments is a disconnect between governments and Uber on exactly the kind of company it is. Uber has, on several occasions, said that it’s simply a technology company that pairs drivers and riders, therefore not requiring it to be subject to the fees and regulations placed on taxi companies. Regulators around the world, which have, in some cases, heard the loud cries from existing taxi consortiums, have argued that Uber is operating a taxi-like service and requires proper licensing under those laws.
New Delhi has been of particular concern to Uber since last year when one of its drivers was accused of sexually assaulting a rider. Soon after, the service was banned by local regulators, citing inappropriate licensing. In January, despite its ban, Uber went back on the roads in New Delhi, saying that it was applying for a radio taxi license. In June, New Delhi authorities rejected the application and started impounding Uber cars.
The company’s victory in the New Delhi court on Wednesday came after Uber petitioned the court, saying that its license denial was inappropriate. The company pointed to the same regulators approving the license of a local ride-sharing service named Ola. The courts reportedly agreed with Uber that it was being treated unfairly and according to Reuters, the company will now have an opportunity to resubmit a license application. Meanwhile, Uber is allowed to operate in the city.
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The Mexico City provision, however, could set a new precedent for Uber in Latin America. The company, which hasn’t faced regulatory scrutiny outside of Brazil to this point, may have to pay 1,599 pesos ($101) per year for each vehicle it operates in Mexico City. Uber will also need to pay 1.5 percent of its domestic revenue to a new city transport fund, according to Reuters. An Uber spokeswoman said that the company has been working with authorities in Mexico City to come up with an agreed-upon solution.
“We are excited about the possibility of regulations that benefit over 500,000 users, that protect our partner drivers, and that translate into a permanent home for Uber in the Mexican capital,” the Uber spokeswoman said in a statement. “Meanwhile, we reiterate that we are in every disposition to pay a permit to operate, as long as it does not elevate prices for our users, or endanger the quality of service our partners provide.”
Despite the regulatory hurdles, there is no shortage of investors who want to partner with the company. Uber is planning to raise between $1.5 billion and $2 billion in a new funding round, according to reports that surfaced in May. Uber would then be valued at around $50 billion, making it the most valuable private technology company in the world.
Updated at 12:40 p.m. PT with comment from Uber spokeswoman and to clarify that Uber has been working with the authorities in Mexico City.
