One of the largest ride-hailing company in Egypt, Uber and it’s competitor Careem have been ordered by an administrative court in Egypt on Tuesday to halt operations in the country.
The court’s ruling comes two years after 42 local taxi drivers filed a case demanding that the Egyptian government cease the operations of the two ride-hailing companies, due to 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.
However, 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.
According to Mada Masr, Alaa Mohamed, one of the 42 drivers who filed the case against the two companies, the 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.
Khaled al-Gamal, a lawyer who represents the drivers, said that the court’s decision to halt the two companies’ activities was in light of their legal violations, adding that government’s bias towards these companies comes at the expense of white taxi drivers and therefore violates principles of equal market access.
In November last year, Egypt’s Cabinet approved a bill to regulate the ride service market. However, the bill which would have required 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 is yet to appear before Parliament for discussion.