President Juan Manuel Santos on Monday gave US transport company Uber six months to register as a formal company in Colombia or be banned from the South American country.
The president had been urged to regulate the taxi app that caused great friction with traditional taxi companies.
According to the local companies, Uber was unfairly competing because, unlike the traditional transport providers, Uber does not pay benefits to its drivers or taxes to the government.
However, according to Uber, it is not an employer, but “partner” of its affiliated drivers.
While formally illegal, Santos said he would allow Uber to continue its operations in the current form for six months. If after that time period, the company is still not registered as a formal transport company it will be banned.
Uber said in a press release that it will “evaluate, together with our partner drivers, the implications and opportunities of this decree.”
The transport company still has a chance of avoiding registration as a Colombian company in Congress, reported newspaper El Tiempo.
If Congress passes a law legalizing mobile transport applications like Uber, it will make the presidential decree obsolete.
The taxi service has been active and popular in Colombia since the introduction of its service in 2013.
However, as traditional taxi companies saw how the app-based service began severely disrupting the transport industry, particularly in the capital Bogota, tensions arose.
Some taxi drivers have gone as far as attacking Uber-affiliated cars.