Ride-Hailing Services: New Entry Barriers in Local Regulations

Ride-hailing services have had a widespread impact on urban transport in cities around the world as countries modify their regulations to incorporate these new services. However, whether these new norms incentivize market competition or constitute restrictions in favor of traditional taxi sectors, is still under discussion. Based on the study of 17 local laws in Mexico (2015-2021), this article uses a categorical data analysis and logistic regression model to study companies' and drivers' legal obligations, user rights, and the heterogeneity of regulations. The findings show that some restrictions are significantly related to the size of the taxi sector and the absence of user rights in new regulations. Contrary to the situation in developed countries, some legal modifications possibly undermine competition in local markets by excluding a significant number of users through legal entry barriers, such as the prohibition of cash payments in a country with low levels of formal banking.