What is now observed is the replacement of direct prohibition by excessively restrictive regulation, capable of producing practically the same economic effect
São Paulo has just passed a law that promises to “organize” the motorcycle taxi service via app. In official discourse, the standard appears as an instrument for road safety, urban planning and user protection. On a legal and economic level, however, it raises a sensitive question: Is this a legitimate regulation or an indirect restriction on urban mobility?
The question is not rhetorical. It directly impacts free enterprise, competition, consumer access to essential services, regulatory efficiency and the very constitutionality of the model adopted by the Municipality.
The topic gains importance because São Paulo was, for a long period, against national jurisprudence when trying to prohibit the transport of passengers by motorcycles via app. Prohibition removed by the Federal Supreme Court when recognizing that Municipalities cannot impose an absolute prohibition on legal activity, under penalty of violating the Union’s competence and free initiative. What is now observed is the replacement of direct prohibition with excessively restrictive regulation, capable of producing practically the same economic effect.
Legislative competence: the first point of tension
The STF has already consolidated the understanding that the competence to legislate on the guidelines of the national transport and traffic policy lies predominantly with the Union. Municipalities are responsible for regulating local aspects of urban operations, not creating structural barriers that denature the service.
By imposing a dense set of cumulative requirements, broad territorial restrictions, operational prohibitions and relevant economic conditions, the new law goes beyond the boundaries of urban planning and starts to directly interfere with the business model, economic risk and the viability of the activity itself. It ceases to be an organizational instrument and acts, in practice, as an indirect mechanism for market control.
Free enterprise, competition and entry barriers
Another sensitive point is the impact of the law on competitive dynamics. The requirements imposed on drivers, such as minimum driver license time, specific courses, recurring toxicological tests, mandatory insurance, municipal registration, tracking and permanent administrative obligations, added to the impositions directed at platforms, create an environment of high regulatory cost.
When the regulatory cost rises excessively, the effect is predictable:
- Reduction in the number of operators
- Market concentration
- Difficulty in entering new applications
- Less competitive pressure on tariffs
- Reduction in innovation
From a constitutional perspective, this directly strains the principle of free competition. From an economic perspective, the burden of regulation is transferred to the consumer, who starts paying more for a service with less supply. Regulation cannot become an indirect instrument of economic selection of who “can” or “cannot” remain in the market.
Territorial and operational restrictions
Municipal law also imposes severe territorial restrictions, with a ban on traffic on roadsides, bus lanes, expanded centers, as well as fences subject to weather, events and schedules. The sum of these restrictions undermines the usefulness of the service precisely in areas of greatest demand.
The practical effect tends to be the concentration of the service in peripheral areas, of lower economic value, breaking the balance of supply and demand. Without robust public regulatory impact studies, these restrictions run the risk of being classified as disproportionate, in violation of the principles of reasonableness and administrative efficiency.
And where is the consumer?
The central justification of the new law is user protection. But the nagging question remains: protect from what and at what price?
Practical experience demonstrates that applications:
- Expanded access to mobility in previously underserved regions
- Significantly reduced travel time
- Decreased the average cost of transportation
- Generated income for thousands of workers
By creating an environment of economic unfeasibility, the law can produce the opposite effect to that announced: less supply, higher prices, informality and exclusion of precisely the most price-sensitive users. Consumer protection cannot be confused with state paternalism that eliminates legitimate alternative choices.
Is there a more efficient regulatory alternative?
There is, and it involves three essential pillars:
- Regulation based on performance, not excessive bureaucracy
- Essential security requirements with technological supervision
- Preservation of the competitive environment and plurality of platforms
The model adopted in São Paulo goes in the opposite direction by favoring formal control, raising entry barriers and compromising the scalability of the service.
Judicialization as a predictable consequence
Given this scenario, judicialization ceases to be a remote hypothesis and becomes a predictable practical consequence. Constitutionality control should revolve around three central axes:
- Legislative competence
- Free enterprise and free competition
- Disproportionality of territorial and operational restrictions
This debate is not ideological. It is technical, economic and structuring for the future of urban mobility in Brazil.
Regulating is necessary, making it unfeasible is unconstitutional
Regulating the motorcycle taxi using an app is necessary. But regulating is not suffocating. It’s not making it impossible. And it is not choosing, through indirect barriers, who can or cannot operate in the market.
If the new law remains in the form in which it was sanctioned, the risk will not only be legal. It will be economic, social and institutional. What is at stake is not just the future of a mode of transport, but the model of the relationship between public authorities, innovation, market and consumer.
*This text does not necessarily reflect the opinion of Jovem Pan.
