Law No. 87 of 2018 regulating Road Transport Services Using Information Technology

The existence of new internet-based ride services such as Uber and Careem has caused a source of controversy in many jurisdictions.

For example, in 2017 London deemed Uber unfit to run a taxi service and stripped it of its license to operate. While the decision was later appealed and Uber is now allowed to continue running in London, courts were previously hesitant to renew Uber’s license for five years.

Similarly, earlier this year in Egypt, forty-two Egyptian taxi drivers filed a lawsuit in the administrative court against both Uber and Careem, claiming that they were only registered as internet companies and should hence not be allowed to operate. In turn, the court ordered the government to suspend the operations of the two companies. However, the government, along with Uber, appealed before the Highest Administrative Court. Meanwhile, the government sent parliament a draft law for the regulation of web-based transport services.

The law has been duly discussed by experts in the telecommunications and transport sectors and it was finally passed in May 2018. The new law was issued in the Official Gazette on June 11, 2018, to be impose the next day.

The law, commonly known as the “Uber and Careem Law”, consists of nineteen articles, as well as four preambles. The preambles make it clear that the law aims to allow such services by regulating them in a way that does not harm service providers and protects consumers.

The law starts out by defining a few terms:

  • Land transport: the usage of private vehicles for public transport

  • Explanatory mark: a “mark” or sticker places on such private vehicles to indicate their usage as providers of land transport

  • Operating license: a license issued for the vehicles used in the service

  • Operating card: a card issued to the drivers of said vehicles to ensure their compliance

  • Licensing fees: fees required from such companies to license the private cars

  • Service fees: fees required from the consumers using the services
    The definitions of these terms reinstate the idea that the law is set out to regulate the licensing and operation of any vehicles tied with service providers like Uber and Careem.

The law then continues to make it clear in Article Two that land transport based on mobile technology is allowed, so long as the service providers are duly licensed. The requirements for such licensing are to be issued by the Prime Minister, with the aid of the Minister of Interior and the Cabinet. However, such licensing will incur certain fees as per Traffic Law No. 66/1973.

Moreover, the new law stipulates that the “relevant ministry” will decide which cars are to be associated with the service, for health and safety reasons. The Prime Minister will decide on the fees of the “operating card”, the license issued to the drivers themselves, which will be no more than 1,000 EGP a year. Similarly, the Prime Minister will elaborate on the mark placed on the cars, its placement, and color.

Having such a law ensures the safety of consumers, as Article Eight warns against using private vehicles for public transport if they are not duly licensed. This is because such licensing will incur background checks of drivers, without prejudice to the preservation of private life, ensured in the constitution, but with the over-arching aim of user safety.

Moreover, one of the reasons Uber and Careem faced issued in Egypt was because of the difficulty of regulating what taxed they should be due. Articles 11-13 clarify that both the companies and the drivers will have to be due taxes, while ensuring the drivers social insurance as to regulate their jobs like any other. The law also incurs a maximum licensing fee of 30,000,000 EGP on service providers.

 

To impose all of the above, Article 15 makes it clear that companies who operate without a license will face a fine no less than 200,000 EGP, but possibly reaching 5,000,000 EGP. Drivers may also face a fine of 5,000 to 20,000 EGP if they do not issue an operating mark or place an explanatory mark on their vehicles.

All in all, this new law is a step forward in realizing the reality that is modern commercialization and transportation. Around the world, the lines between the virtual internet and real life have been blurred, where consumers can now do everything from their mobile phones. Here in Egypt, millions of people have resorted to Uber and Careem for their everyday transportation needs. These companies have faced criticism: from taxi drivers, for taking their jobs, and from consumers, many of whom having been faced with dangerous or questionable drivers. The new law allows for taxi drivers to have a chance to legally join such transport services, which should hopefully lead to their acceptance of the new services. The law in turn ensures more social inclusion into these now legally-regulated companies.Having such a law not only duly licenses drivers and gives them a legal job status, but it also regulates the hiring process to ensure safety and comfort for users. Most importantly, it shows how Egypt is adapting the real changes, which truly is something to commemorate.


Prepared By

Marina Iskander – Partner

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