The Strange Case of Mexico City’s $24 Million Uber Trust

(Bloomberg) -- Over the past three years, Uber Technologies Inc. has put nearly $24 million into a trust set up to help modernize rival taxi fleets and improve traffic flow in sprawling, congested Mexico City.

What’s happening with the money?

Officials with the city’s Ministry of Mobility, Semovi, aren’t saying. Uber says it doesn’t know. The Movimiento Nacional Taxista union says cab drivers haven’t seen a cent of it.

What’s in the trust may not be a lot of money in the scheme of things, less than 2% of the annual municipal budget, but that doesn’t make the mystery surrounding it any less bewildering.

“As citizens, we’d like to know how this money has been used,” said Liliana Ruiz, an analyst at Mexico Evalua, a think tank that focuses on the use of public resources in the country.

Created in September 2016, the trust -- called the Taxi, Mobility and Pedestrian Fund -- was advertised as a source of revenue to do things like upgrade public transportation infrastructure and train cabbies to improve their service.

For Uber, it was a way of trying to make peace with the city, frustrated by the influx of vehicles, and with taxi owners, who complain bitterly about ride-hailing platforms stealing their business. Uber agreed to deposit 1.5% of each trip started in Mexico City into an account at Banco Interacciones, part of Grupo Financiero Banorte SAB. Cabify, a ride-hailing outfit owned by Maxi Mobility Spain SL, does the same.

Now those companies are scratching their heads about what’s being done with what’s in the pot. Semovi won’t acknowledge that the account holds more than $23.7 million; that’s Uber’s calculation of the amount it has put in so far. Cabify declined to comment on its contribution.

Talking freely about the trust is complicated because the 1.5% isn’t a tax paid into city coffers but a toll that flows to a private trust, said Guillermo Avila, urban mobility regulation director at Semovi. The ministry is the trustee but Avila said it’s bound by confidentiality rules. He also said his office has been analyzing how to get over that hurdle and allow for transparency.

Uber sees things differently.

“Even though the trust establishes certain confidentiality requirements related to the fiduciary, these don’t apply to Semovi because it doesn’t have fiduciary character,” the company said in a statement.

Ruiz at Mexico Evalua said that private trust or no, the funds are destined for public use and that “because Semovi is a public entity, it has an obligation to be accountable.”

According to Uber, one withdrawal was made by Semovi in August, when it took out 110 million pesos ($5.8 million). “We hope this amount, as the trust intends, will be destined for mobility projects in Mexico City,” said Maria Eugenia Zurita, Uber’s spokeswoman in Mexico.

Asked about the 110 million, Mayra Cabrera, director of mobility culture at the ministry, pointed to a Dec. 11 post on Twitter announcing a scrapping and substitution program for old taxis and said the money was going to be used for that, without specifying when.

Ignacio Rodriguez, head of the taxi union, said that is in fact an existing program that has been funded by other sources for years.

What cab drivers most want from the trust at this point is transparency, Rodriguez said, but asking Semovi officials hasn’t gotten them anywhere. “They’re very tight-lipped.”

©2019 Bloomberg L.P.

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