MEXICO CITY, Oct 16 (Reuters) - The Mexican Supreme Court on Tuesday struck down a ban on cash fares for ride-hailing firms, setting a key precedent for Uber and other industry players seeking to reach millions of Mexicans without credit cards.
With a majority of eight ministers, the court ruled that a ban on cash fares in the Western state of Colima was unconstitutional, Uber said. The company does not currently operate in Colima.
Uber has fought fiercely for the ability to accept cash fares in Mexico, despite concerns that the practice risks making drivers targets for robberies. But in a country where more than 60 percent of the population lacks a bank account, cash fares are a business imperative for Uber, analysts say.
“The Supreme Court’s decision is beneficial not only for the people of Colima, but for all Mexicans,” Enrique Gonzalez, Uber’s regional director of the legal department, said in a statement. “It will help with the economic development and generation of opportunities for self-employment in the country.”
Uber operates in 43 cities in Mexico, accepting cash everywhere but the capital and the central state of Puebla, where local governments have banned that form of payment.
More than 50 percent of Uber’s trips in Mexico are paid for in cash, Sergio Romero, the company’s legal director in Mexico, said in an interview.
Uber argued that the Colima mobility law, passed last year, discriminated against users who do not have bank accounts and also overstepped the state’s bounds as the use of cash is governed by the federal government.
The case before the Supreme Court was brought by lawmakers in Colima who objected to the regulation.
Ruling on another aspect of the regulation, the Supreme Court rejected a cap on the number of ride-hailing drivers who can work at any given moment, handing another win to Uber and other companies in the sector. (Reporting by Julia Love Editing by Leslie Adler)