São Paulo city brings in new rules to accommodate Uber

But the app doesn't want to be considered a taxi service

Car sharing app Uber is now finding itself in a strange predicament in Brazil as São Paulo city has brought in new rules as an attempt to allow taxis and new alternatives to coexist.

Announcing the compromise, the mayor of South America's second largest city Fernando Haddad said a new class of taxi would be created, which would accommodate vehicles operating through Uber of other apps.

Some 5,000 operating permits will be created for the new fleet and the new taxis will be known as "black cabs." These vehicles will also have to meet quality and efficiency standards and drivers without the specific permit caught working would be fined R$1,700 ($452).

In September the São Paulo city council voted to ban paid car-sharing apps such as Uber.

Uber maintains that it is not a taxi-hailing tool. In a statement, the firm reiterates that "it is not a taxi company and therefore does not belong in any category of this type of service," adding that it deems the ruling "notoriously unconstitutional."

When announcing the new regulations, Haddad said that a study group would be formed to propose regulations for "new transport services." Uber stated it is now waiting to see the proposals. The São Paulo city government has also launched a tender recently to select technology-based projects to improve the mobility issuesof the metropolis.

There are currently 500,000 Uber users across the four Brazilian capitals where it operates, the company says. There are Bills against the app being voted in all these state capitals- and 13 other cities where it doesn't operate yet have already presented similar projects.

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