Uber and Careem, two of Egypt’s largest ride-hailing companies, have been ordered to halt their operations in Egypt by a Tuesday administrative court ruling, according to lawyer Khaled al-Gamal.
The court ruled in favor of 42 local taxi drivers who filed a case in 2016 to demand that the Egyptian government cease the operations of the two ride-hailing companies, based on the fact that their business model violates Article 32 of Egypt’s traffic law, which stipulates that vehicles should not be used for purposes other than those for which they are licensed.
Following the ruling, a source familiar with the case told Reuters that Uber intends to appeal any decision regarding the suspension of its activities or licences in Egypt.
The business model of US-based Uber and its Emirati competitor Careem entails drivers registering their private vehicles with the ride-hailing companies and using them to provide customers with an on-demand taxi service.
In March 2016, local taxi drivers protested Uber and Careem’s presence in the Egyptian market, which has since expanded. Alaa Mohamed, one of the 42 drivers who filed the case against the two companies, told Mada Masr that taxi drivers’ livelihoods have been gravely harmed by the emergence and dominance of application-based ride service companies in the Egyptian market, which rendered some local taxi drivers unable to pay the installments for their taxicabs.
Gamal, who represents the drivers, said that the court’s decision to order the government to halt the two companies’ activities was in light of their legal violations. The lawyer added that the government’s bias towards these companies comes at the expense of white taxi drivers and therefore violates principles of equal market access.
Egypt’s Cabinet approved a bill to regulate the ride service market in November of last year. The bill would have required application-based ride-hailing companies like Uber and Careem to pay taxes and insurance subscriptions for their drivers and obliged drivers to be owners of their vehicles, rather than leaseholders. The bill, which would have also established a seven-hour daily cap on drivers’ working hours and expanded ride service companies’ services to include carpooling options as well as local taxis, is yet to appear before Parliament for discussion.