Parliament enacts law regulating ride-hailing apps

CAIRO – 7 May 2018: The House of Representatives enacted on Monday the law for regulating ride-hailing apps like Uber and Careem after reaching a final decision regarding the three delayed articles from Sunday’s session.

During the plenary session, the proposal introduced by MP Marian Azar to amend the name of the law to include “communication” instead of “information technology” was refused.

Parliament approved the draft law Sunday, including several steps to legalize the electronic transport services.

The new bill consists of four articles regulating the work of the two major companies in Egypt, while delaying three other articles for further discussion between MPs and the concerned ministers.

The first article obligates the ride-hailing companies to settle their legal conditions within six months of issuing the new law and paying annual fees to be determined by the Cabinet.

The third article sets two months for the Cabinet to issue its regulations to guarantee the quality of the services.

The bill also proposes issuing special licenses for vehicles that use the app and obligating them to put a mark that refers to the service provider, whether Uber, Careem or any other company planning to provide transport services in Egypt, while prohibiting individual drivers and car owners from offering their services.

MPs objected to the proposed article requiring the companies pay fees to the government amounting to LE 10 million ($565,000), saying that it will make them refrain from working in the Egyptian market, while there were also proposals for the vehicle’s owner to pay annual fees reaching LE 2,000.

The new law will obligate the companies to pay taxes and insurance to the government, and it gives the government the right to determine the conditions of the working vehicles.

The ride-hailing companies will be obligated to protect the privacy of clients’ data and to provide the national security apparatuses with the data if necessary.

Violating companies will be fined up to LE 5 million, while violating individuals will be fined up to LE 20,000.

Uber has appealed to the Highest Administrative Court against the Administrative Court order suspending the two ride-hailing companies’ licenses in Egypt.

The Cairo Administrative Court had accepted lawsuits demanding the full suspension of activities for the two popular ride-hailing companies, Uber and Careem, in Egypt.

The Cairo Court of Urgent Matters then ruled to annul the Cairo Administrative Court's verdict suspending the license of the two largest ride-hailing applications in Egypt.

The two companies applied to this court, which allowed them to operate until a final decision from the Highest Administrative Court is issued. However, questions then started to arise on the legality of the ruling and whether the Court of Urgent Matters has jurisdiction to annul the Administrative Court’s verdict.

The case began in February 2017 when 42 traditional taxi drivers filed a lawsuit against U.S.-based Uber and its Dubai-based competitor Careem, accusing them of violating the traffic law by using privately-owned vehicles for commercial purposes. They also claimed that the two firms were registered as a call center and an internet company, respectively, meaning they were not legally regulated as a ride-hailing service. The case was filed against the two operators as well as the government.

In an attempt to legalize the status of Uber and Careem, a joint parliamentary committee began immediately discussing a new draft law to regulate the operation of privately-owned transport services.

The Egyptian Cabinet sent the draft law on March 21 to the House of Representatives to be officially approved and ratified, hours after the Cairo Administrative ordered the suspension of the two companies’ licenses in Egypt.