Be Careful Who you Sue, the Demise of Egyptian Taxis


(Bick Bhangoo) #1

Last year, 42 taxi drivers filed a suit against Careem and Uber, as well as against the Egyptian government claiming that all accused parties were in violation of the Egyptian traffic laws. To be specific, the suit centers its claims around the laws callus that states private owned vehicles cannot be used for commercial purposes. The taxi drivers also claimed that Careem is registered as call center service and Uber is registered as an internet technology company, which means both are not legally registered as regulated ride-hailing services.

Due to the claims solid evidence of facts, based on the letter of the law, the Cairo Administrative Court suspended both companies from operating in Egypt. In the meantime, both Uber and Careem have appealed, and this means the case is being taken to Egypt's Higher Administrative Court.

Every country has different laws and clauses that stipulate how companies may operate within the country. In Egypt's case, the law is different to the US, UK, and elsewhere, as every country law are different from each other's. This means that every case filed in a different country requires a specific legal team to deal with the case locally, and the results cannot really be used to help Uber in other cases in other countries.

However, the real face of this story is not the taxi drivers legal standing, but their inability to recognize change and accept it. Rather than go the Gett way, they decided to fight an entire industrial sector that has already taken over the rest of the world. The outcome is that the taxi drivers won the court case but lost their source of income.

The Egyptian Case Explained

The Administrative Court of Justice based its decision on the findings as presented by the 42 taxi drivers on these facts:

  1. The government failed to decline the two offending company's licenses to operate.
  2. The two companies do not have the administrative paperwork that allows them to operate as ride-hailing companies in Egypt.
  3. According to Article 4 of the Traffic Law, private care is intended for personal use, taxis are intended for carrying passengers for a fare and passenger cars must be able to carry up to eight people.
  4. According to article 32 of the Egyptian Traffic law, vehicles are not allowed to be used for any other reason than those registered to it.
  5. The law also stipulates that the Ministry of the Interior will penalize violations of the law 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.
  6. The court found that the Ministry of the Interior did not follow the law when dealing with Uber and Careem and their drivers.
  7. The court stated for the record that, "The Ministry of Interior's failure to implement this penalty constitutes a negative decision that goes against the law. Thus, they 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 outcome of the trial is quite straightforward, and until the government changes the law, the Higher court of appeals will most probably not over-rule the lower courts decision.

Egypt's Cabinet prepares to legalize ride-hailing services

Due to the pressure of Uber and Careem case, as well as of the public, the Egyptian government is starting to take steps in writing up a new law that will regulate ride-hailing companies to operate in Egypt.

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The Egyptian Cabinet's official spokesperson, Ashraf Sultan, told the press that the government is currently preparing a draft law, that was introduced on March 21st. The new law was sent to the State Councils legislation department for revision after the review but was taken from the council directly to the House of Representatives for immediate approval.

The official response from the Parliament's transport and telecommunications committees are to approve a new law as soon as possible which will allow the Higher court of appeals to rectify the original case ruling and allow the companies to operate in Egypt, once they conform to the new regulations.

The new law will stipulate all the regulatory requirements as well as impose the fees and taxes on ride-hailing companies, which will be based on their activity. This is perhaps the underlying reason why the government wants the law to go through; it will increase the State income from taxes by billions. Another reason is that it will provide employment for hundreds of thousands of unemployed young people as well as improve the transport infrastructure for tourism.

The new law will place Careem and Uber under the supervisor of the Ministry of Transport.


(Andrew Martin) #2

I think that a lot of actions end up with a reaction and result that can jolt a persons self confidence. That is why it is so important to think 200 times before wasting a lot of money on lawyers, only to end up paying them with hard earned cash and not solving the situation where both sides can win-win. The reasons why arbitration is considered to be beneficial in some instances.