MEXICO CITY, Dec 5 (Reuters) - Uber Technologies Inc said on Tuesday it will stop accepting cash payments in the central Mexican state of Puebla to comply with demands from authorities, as the ride-hailing company faces a new wave of regulation in Mexico.
Following the murders of two female college students, lawmakers in Puebla approved new rules in October aimed at better vetting drivers working for ride-hailing companies such as Uber and Cabify.
The rules specify that the companies should use "electronic payments," but Uber continued offering users in the state the option to pay in cash after the law went into effect on Nov. 7.
Uber maintains that the language in the law does not expressly ban cash payments.
Nonetheless, a spokesman for the company said it will stop accepting cash fares in Puebla on Friday.
A spokesman for Puebla's Secretary of Infrastructure, Mobility and Transport did not immediately respond to a request for comment.
Authorities from Mexico to Brazil have tried to rein in Uber's use of cash payments, in Brazil because of concerns that cash makes drivers targets of crime, and in Mexico because of worries that allowing cash puts Uber in direct competition with traditional taxis.
But Uber has fought to maintain the policy, viewing cash fares as a crucial tool to reach users in Latin America. Such emerging markets, where many users do not have credit or debit cards, are key to Uber's future growth.
In Puebla, 158,000 users have paid with cash since the company began offering the option in March, an Uber spokesman said.
"We will continue working to search for new alternatives that allow people from Puebla who depend on cash payments today to resume traveling with us," Uber wrote in an email to users in the state.
Lawmakers in the state of Quintana Roo, home to tourist destination Cancun, are also discussing legislation that would ban cash payments. Uber has said the legislation, if passed in its current form, would drive the company out of the market. (Reporting by Julia Love; additional reporting by Noe Torres Editing by Marguerita Choy)