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UPDATE 1-Uber CEO lobbies in Brazil against tough ride-hailing regulation

(Adds CEO, driver comments, details of protest)

BRASILIA, Oct 31 (Reuters) - The new chief executive of Uber Technologies Inc appealed to Brazilian lawmakers on Tuesday to block elements of a bill he said threatened the ride-hailing app's business model, calling for dialogue and more sensible regulation.

Dara Khosrowshahi, who held talks with senior Brazilian officials in the capital Brasilia, said Uber was pressing senators to remove rules that would require its drivers to own their cars and be licensed with their local municipalities, like taxis.

Uber has said that, if the current bill is approved in the Senate on Tuesday, it would undermine its ability to operate in Brazil, its second-biggest market, by making it too expensive and bureaucratic for many of it drivers. That would harm the livelihoods of the 500,000 people driving for the app in Latin America's largest economy, according to Uber.

The crackdown in Brazil comes after authorities in London decided not to renew Uber's operating license last month and highlights the legal threats mounting against its fast-growing foreign operations.

Khosrowshahi struck a conciliatory tone in an interview published in a Brazilian newspaper, suggesting Uber was open to finding compromise with local lawmakers, a break in style with his pugnacious predecessor, Travis Kalanick.

"In the past we were a bit aggressive but we have to understand that it's not just about what we want and reach compromises," Khosrowshahi told O Estado de S. Paulo. "We are not against regulation. Regulating services like Uber is totally appropriate."

However, after talks with Finance Minister Henrique Meirelles, the executive struck a more strident tone, saying that the future of the ride-hailing app in Brazil "depends on the decisions of the government".

If passed, the bill would go to President Michel Temer for his signature. An aide to Temer suggested in April he might veto parts of the new regulations that turn the rise-hailing app into a conventional taxi service.

But Senate leaders said they plan to allow amendments to remove the taxi number plate and ownership requirements, which would mean the bill will have to return to the lower house to approve the changes.

UBER, TAXI DRIVERS PROTEST

Hundreds of taxi and Uber drivers lined on the opposite sides of the esplanade in front of Brazil's Congress to demonstrate for and against the bill.

Uber's executive spokesman for Brazil, Fabio Sabba, told Reuters he was punched in the face by a taxi driver as he gave a media interview inside the Senate building.

"I'll have to find another job. I was unemployed and driving an Uber car is my family's only source of income," said Abel Balbino, 50, from the neighboring state of Goias. "This PLC-28 law will not allow me to use my wife's car for Uber."

An Uber company representative said that other serious setbacks in the bill included the need for its drivers to use red number plates like regular taxis and a ban on rides between cities.

Taxi drivers bused into Brasilia by unions said Uber's lower fares had cut their income by almost half.

"Uber is destroying our age-old profession with unfair competition," said Antonio Barbosa, who traveled 26 hours from the northern state of Bahia to protest.

In a study issued hours before the Senate was due to vote, Brazils antitrust regulator CADE found that car-hailing apps had improved the market for individual passenger transport by increasing competition. CADE said apps like Uber, Cabify and 99 should lead to less regulation rather than more.

In recent days, the car-hailing companies have urged Brazilians by WhatsApp and social media to press their senators to vote against the measure, which was authored in the lower house by a congressman from the leftist Workers Party backed by taxi cooperatives and unions.

Khosrowshahi took over in August from Uber co-founder Kalanick, assuming the daunting task of mending the company's public image, repairing frayed investor relations and rebuilding employee morale after a string of crises.

Khosrowshahi's trip to Brazil, first reported by Reuters on Friday, followed a recent visit to London.

"We had a very constructive dialogue and I think we will be able to resolve their concerns," he said of the London trip.

Khosrowshahi told Estado that Uber was making security its top priority in 2018 after his teams in Brazil, Mexico and other parts of Latin America raised concerns about the issue.

In February, Reuters reported that a surge in violence against Uber drivers in Brazil last year was forcing executives to rethink the use of cash payments and admit they had underestimated security risks here. (Reporting by Anthony Boadle and Brad Haynes; Editing by Daniel Flynn and Bill Rigby)