MAYOR OF RIO DE JANEIRO SIGNS LAW FORBIDDING UBER

Only registered taxis can carry passengers in Rio de Janeiro. Services like Uber would no longer be legal.

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The perpetual war between taxis and Uber has yet another chapter. On Monday, Eduardo Paes, the Mayor of Rio de Janeiro, signed a law forbidding private cars to transport passengers. Rio’s City Council voted on the law last Friday. The text says that only registered taxis have the right to carry passengers as a paid activity. Drivers who disrespect the ruling may face hefty penalties.

But even with the approval of this law, nothing changes for Uber drivers for the time being. A judicial decision allows apps like Uber to operate until federal legislation decides on the matter. Rio’s council members, however, have stated that they will try to lift the decision.

In a statement, Uber has said the company would completely ignore the new law: “By approving a redundant law that goes against the interests of the city, [Eduardo] Paes ignores the thousands of people who use the app to generate revenue for themselves and their families.”

Problems Ahead For Uber?

In addition to the strong opposition from the taxi lobby, transportation apps must also face legal battles that could jeopardize their business plan. Back in September, a group of drivers filed a lawsuit against Uber asking to be considered formal employees – with all the rights and benefits attached. In the case of a loss, the app’s services would become much more expensive.

If the drivers’ case is accepted by the Brazilian Justice system, it would create a precedent allowing more than 10,000 other drivers to seek the same rights: 13 paychecks a year, paid vacations, and pension benefits. Today, they are considered autonomous drivers who use Uber as a platform to connect with passengers. They pay the company a fee per ride, which can amount to 25 percent.