Digital Platforms Oppose Mexico’s Labor Reform, Citing Confusion

Digital platform operators, such as Uber and Rappi, are urging the Mexican government to reconsider a newly approved labor reform, warning that the regulations could inflate their operational costs by nearly 50%.

The law, which has already received unanimous approval from the Chamber of Deputies, aims to extend social security and labor rights to workers on digital platforms, most of whom are daily wagers. However, it has not yet been implemented.

Uber has cautioned that if the reform is enforced, customers could see a 40-50% hike in fares. Other platform giants, such as China’s Didi and Colombia’s Rappi, have criticized the legislation for its lack of clarity, calling for revisions to address ambiguities.

At the heart of the reform is a tiered classification system for platform workers. Those earning below Mexico’s minimum wage would remain independent contractors, while those earning above the threshold would be categorized as formal employees. This reclassification would impose higher tax obligations on platforms, a major source of concern for the industry.

Drivers and delivery workers have also voiced apprehension, fearing they may face taxes ranging from 10% to 30% if reclassified as employees. Moreover, the law includes a provision enabling workers clocking over 288 hours per month to qualify for profit-sharing.

However, the legislation simultaneously allows workers to operate for multiple platforms, raising questions about how any single platform would manage social security and insurance responsibilities for such employees.

Platform representatives have also accused the government of backtracking on its earlier assurances that the tax regime would not be altered. They argue that the reform’s provisions lack coherence and could disrupt the digital economy.