By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Starting on Tuesday, May 1st, Rio City Hall will begin imposing a one percent tax on the city’s most popular ride-hailing applications, such as Uber, 99, and Cabify, for all rides taken through the app.

Rio’s most popular ride-hailing apps will now have to pay a one percent tax to City Hall for each ride taken through the app, photo by Mark Warner/Flickr Creative Commons License.

Rio approved the new measure last week and according to city officials, the charge will generate upwards of R$40 million a year.

City official Fabio Pimental explained to local news outlet Globo that the R$40 million figure “was based on data from the ISS [Tax on Services] that transportation companies pay.”

But, he added, “It is important that we have a more specific figure, which we will only have after we have access to company data.” Pimental was referring to the new measure’s requirement that all of the city’s ride-hailing apps turn over certain data to city hall, such as the number of rides ordered and distances traveled.

“[The data] must be opened to guarantee to city hall the real administration of the use of the urban road,” Pimental said.

Pimental emphasized that the money generated from the new tax would be “invested in the conservation of roads, mobility policies, campaign and traffic education advertisements, and also in the Taxi.Rio app (City Hall’s own version of a ride-hailling app).

In response to the new tax, Uber announced on Monday, April 30th that it would be raising prices by about fifteen percent for rides originating in Rio’s Zona Sul (South Zone), Centro, Barra da Tijuca, and Recreio dos Bandeirantes.

In a statement, Uber said that the price increase is necessary due to ” the requirement of the municipal decree that regulates individual private transportation by applications in the municipality of Rio, which establishes a collection percentage of the total value of all trips” and “the innumerable increases in the price of fuel in the last year.”

Last month, Brazil’s Chamber of Deputies approved a bill that attempted to regulate ride-hailing apps by establishing a series of requirements, such as prior authorization from city hall and mandated driver health insurance.

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