Thursday,21 February, 2019
Current issue | Issue 1393, (10 - 16 May 2018)
Thursday,21 February, 2019
Issue 1393, (10 - 16 May 2018)

Ahram Weekly

Call a legal taxi

MPs approve a new law regulating the operation of ride hailing companies apps Uber and Careem, reports Ahmed Morsy


Call a legal taxi
Call a legal taxi

A new law regulating ride-hailing companies like Uber and Careem was passed on Monday, giving the companies, which have operated without licensing for nearly four years, six months to adjust their legal status.

Article 5 of the law states ride-hailing companies must pay a fee of up to LE30 million to obtain a five-year renewable licence to operate. The fee can be paid in installments.

Article 4 stipulates drivers working with the companies will be charged 25 per cent more than taxi drivers when renewing their vehicle licences. Article 3 requires drivers of any ride-hailing company to acquire an individual permit to work which will cost up to LE1,000 per year. They will also be required to mark their car with a symbol identifying the company for which they are working.

Companies that do not adjust their legal status within the six-month grace period can face fines of up to LE5 million. Drivers working without the required permit can be fined between LE5,000 and LE20,000.

US-based Uber issued a statement saying approval of the “progressive regulations” is a major step forward.

“We will continue working with the prime minister and the cabinet in the coming months as the law is finalised, and look forward to continuing to serve the millions of Egyptian riders and drivers that rely on Uber.”

Egypt is the company’s largest Middle East market. It employed 157,000 drivers in 2017, and four million passengers have used the service since its launch in Egypt in 2014.

UAE-based Careem, Uber’s main rival in the Egyptian market, also said it was happy with the legislation.

“The law is a step forward for Careem and for Egypt and an example for the region,” said a company statement.

Careem launched its services in Egypt in 2014 and operates in 13 countries in the Middle East and Asia. Uber has a presence in 80 countries.

Though the two companies expressed satisfaction with the regulations their local agents worry the permit costs and additional vehicle licensing fees drivers now face will prove a burden.

“I think the fees are too much,” said an agent who spoke to Al-Ahram Weekly on condition of anonymity. He worries some drivers will stop working because of the increased costs, and as the costs are passed onto passengers, demand will fall. 

Ali Essam drives for Uber to supplement his income from his first job. He feels the increased fees, particularly the 25 per cent additional vehicle licensing charge, unfairly penalises people already struggling to make ends meet.

The annual LE1,000 fee to get the card is okay but the extra 25 per cent on the licensing fee feels punitive, Essam told the Weekly.

He has no objection to marking his car which he thinks will give customers more confidence when hailing a ride and help avoid problems with the traffic police.

The legal grey area in which ride hailing apps were operating came to a head when a group of taxi drivers filed a suit against Uber and Careem, arguing they were using private cars as illegal taxis. A court ruling in March suspended the two companies’ services in Egypt. In April the Court of Urgent Matters suspended the implementation of the previous month’s  ruling, allowing the two companies to continue providing services pending a decision by the Higher Administrative Court, due on 12 May.

Observers believe the new regulations, which include a provision for taxi drivers to join the two companies’ fleets, will assuage their anger.

The law was passed without any substantial amendments to articles 9 and 10 which require ride hailing companies to retain user data for 180 days and share it with the authorities “upon request”.

The State Council had expressed concern the articles were “unconstitutional” and there was widespread speculation they would be removed from the final draft. The only change that was made is that the companies must store the data on their servers abroad rather than locally, as was first stipulated.

“I don’t feel comfortable with info of my trips being available to anyone. I don’t need to be monitored,” says 35-year-old Yasser Mahfouz, who relies heavily on the two companies’ services.

Ahmed Samir, another regular user of Careem and Uber, believes the data retention enhances security.

“The country is fighting terrorism and needs to be prepared for any possible crime. This kind of monitoring only protects citizens,” he said.

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