Mexico City is becoming a headache for Uber
The transportation company that debuted on the New York Stock Exchange on Friday presented an annex in its initial public offering prospectus on Thursday that lists what it considers new risks to its operations.
With one of its largest user bases, the capital of Mexico is one of them. The new local government recently banned the use of cash to pay for shared-travel services and added the requirement that drivers obtain more licenses to offer transfers. As in many other cities, taxi drivers' unions have been protesting Uber and other transportation companies for months, claiming that they have grown disproportionately thanks to unfair advantages such as lower taxes and fewer requirements for permits.
"We are still evaluating the impact of these regulations, but such operational requirements, if implemented without modifications, could have a negative impact on our business," Uber explained in the document. "Our failure to comply with such regulations may result in the revocation of our license to operate in Mexico City."
Uber and some of its competitors have allowed the use of cash as a payment alternative in markets where banking penetration is low, as in the case of Mexico. It also accepts cash in Brazil, India and some countries in the Middle East. Last year, travel paid in cash accounted for about 13% of its global gross reserves, according to the document.
The company cooperates with the Federal Government of Mexico on another front. The platform agreed in November to join a program in which it will withhold taxes from members who earn income from their transport and food delivery services. This week, the Undersecretary of Finance, Arturo Herrera, told Bloomberg that the government is preparing to announce the launch of a tax agreement with technological platforms.