Uber and Careem: The two major ride-hailing services in Egypt - Egypt Today Uber and Careem: The two major ride-hailing services in Egypt - Egypt Today

Understanding debate over Uber, Careem

Sat, Mar. 24, 2018
CAIRO – 24 March 2018: The past couple of weeks have seen the winding up of the discussion on Uber and Careem’s right, or lack thereof, to operate in Egypt.

In February 2017, 42 taxi drivers filed a case against UAE-based Careem and U.S.-based Uber, as well as the Egyptian government, accusing the two companies of violating Egyptian traffic laws, specifically a law that bans the used of private-owned vehicles for commercial purposes. The taxis also claimed that the two firms were registered as a call center and an internet company, respectively, suggesting that they are not legally regulated as ride-hailing services.

In response to these accusations, the Cairo Administrative Court has accepted the case and ordered the suspension of the two companies’ licenses in Egypt. The two companies have appealed the court’s verdict, meaning that Egypt's Higher Administrative Court will look at the case.

The ruling explained

The Administrative Court of Justice, including counselors Bakhit Ismail, Omar Dahi and Mohamed Khaled, explained their reasoning behind the ruling, stating that the failure of the government to take action to prevent Uber and Careem’s activity and their failure to cancel the licenses of vehicles dealing with the two companies goes against the law.

The court further explained that Uber and Careem do not have the administrative paperwork allowing them to operate in Egypt and are therefore operating outside the law.

After listening to traditional taxi drivers, customers who fear going back to using traditional taxis only and the two companies who have stated their respect and acceptance of Egyptian law and the judicial ruling, the court readapted the requests of the traditional taxi drivers, obligating the government to take legal and technical measures, including technological solutions, to ensure that ride-hailing companies are operating within the limits of the law.

The court further clarified that Article 32 of the Traffic Law prohibits the use of any vehicle for anterior purposes to that specified in the issued license.

The Interior Ministry was authorized to impose a penalty in case of violation by revoking the license of the vehicle, revoking the driver's license and not allowing them to apply for a new one, or seizing the driving license for 30 days from the date the violation was carried out, noting that the period is prolonged when violations are repeated.

In its ruling, the court defined the different types of car licenses depending on the definitions mentioned in Article 4 of the Traffic Law. Article 4 specifies that private cars are those intended for personal use; taxis are intended for carrying passengers in exchange for a fare; and passenger cars are intended to transport at least eight people.

The court added, “The Ministry of Interior's failure to implement this penalty constitutes a negative decision that goes against the law.” Therefore, the government must “take legal measures to prevent Uber and Careem, as well as drivers employed by the two companies from using their applications to transport passengers via private cars licensed for personal use.”

The court further stressed that failure by the administrative branch of the government to take such measures would be against the law and likely to be revoked or cancelled in case of a trial.The court did not address definitively what the government should do to legalize the two companies’ operations within Egypt.

Commenting on the government’s defense that it has no jurisdiction over the matter, the court stated that “no legislation has been issued as of yet to regulate the operation of Uber and Careem in Egypt. So far, only a draft law was prepared by the legislative branch of the Ministry of Justice to prepare for the issuance of a law, but no law has been passed yet.”

Photo courtesy of Careem
In the statement, Careem thanked its customers and captains for their continued loyalty - Photo courtesy of Careem

Cabinet moves to legalize ride-hailing services

According to Thursday statements by Ashraf Sultan, official spokesperson of the Egyptian Cabinet, the government has taken serious steps to regulate the operation of ride-hailing services before the recent controversial lawsuit demanding banning the service in the country.

Sultan noted in a phone call to Mehwar that the Cabinet submitted a draft law regulating the privately owned transport services to Parliament on March 21 to be officially discussed.

He added that the draft law was first sent to the State Council’s legislation department for revision and to check if any further details need clarification. However, the Cabinet later decided to send it directly to the House of Representatives to be officially approved and ratified.

Moreover, Parliament’s transport and telecommunications committees stated that a law has to be issued to legalize the status of such companies as an exit from this crisis.

The transport committee’s head, Wahid Karkar, said that the service provided by Uber and Careem serves millions of Egyptian citizens and is available in several countries around the world. However, according to Karkar, a legal framework is needed to regulate the transportation service.

He added representatives from the two companies have attended a meeting in the House of Representatives to express their willingness to legalize their situation and implement the orders of the state to develop legal mechanisms of operation in Egypt. “The draft law that shall be issued will impose fees and taxes on the companies based on the volume of their activity in Egypt,” Karkar told Egypt Today.

Ahmed Zidan, secretary of Parliament's Information and Communications Technology Committee, told Egypt Today that these ride-hailing companies provide several job opportunities to a large sector of youth. He added that once the State Council submitted the draft law, the parliamentary committee will review it carefully.

Ahmed Badawy, deputy head of the Telecommunications Committee, told Egypt Today that Parliament has been working on the draft law to legalize the status of the two companies and merge them in a legal framework, noting that in light of the new law, the two companies will work under the supervision of the Ministry of Transportation.

Simon Dawson
A photo illustration shows the Uber app on a mobile telephone, as it is held up for a posed photograph, in London, Britain November 10, 2017 - REUTERS/Simon Dawson

According to lawsuits filed previously by taxi drivers, the GPS-based applications Uber and Careem use unlicensed private cars as taxicabs, and thus profit from an “illegal” activity.

It also mentioned that the two services are not legally regulated and affected the livelihood of the taxi drivers.

In 2016, Uber said that 30,000 drivers are using the service in Cairo as a source of income; the number of drivers who have joined the service has grown 73 times in one year, making Cairo the fastest-growing market for the company in Europe, the Middle East and Africa.

Uber started operating in Cairo and Giza in November 2014, and began in Alexandria a year later.

Careem, a Middle East competitor to Uber, said on Tuesday it has not received any request to stop operations in Egypt and will continue to operate normally.




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