Egyptian parliament approves bill regulating ride-sharing apps

While Uber and Careem largely welcomed the new law, concerns remain about data sharing.
Sunday 13/05/2018
An Uber employee shows the mobile application at the launch of the car-hailing service in Cairo. 	(AP)
Revolutionising transportation. An Uber employee shows the mobile application at the launch of the car-hailing service in Cairo. (AP)

CAIRO - Ride-sharing companies Uber and Careem expressed concern over financial and security conditions stipulated in a new law in Egypt that seeks to regulate their services.

The Egyptian parliament approved a draft law to regulate ride-sharing apps, potentially ending a lawsuit that had threatened to shut down ride-sharing companies but also imposing stringent fees and data-sharing requirements.

The new law requires ride-sharing companies in Egypt to submit information about clients to security agencies on request, a mandate viewed by the companies as an infringement on clients’ privacy.

“We object to sharing the information of our clients with anybody,” said Rania Gaafar, the general manager of Careem. “The clients have a right to the privacy of their contacts and movement details.”

Ride-sharing companies revolutionised Egypt’s transportation network and have sidelined many traditional taxi operators. Even Egyptians with private cars often prefer to use ride-sharing apps to avoid Cairo’s chaotic traffic and benefit from ride-sharing companies’ inexpensive pricing, in comparison to traditional taxis.

Thousands of taxi drivers have protested the loss of revenue to Uber and Careem. They staged street demonstrations and formally appealed to the government to tighten restrictions on the ride-sharing industry.

The March 20 ruling was in response to a lawsuit filed on behalf of taxi drivers who argued that Uber, Careem and other ride-sharing apps allowed citizens to use their private cars as taxis. Uber and Careem appealed that ruling, which had ordered them to suspend service.

Soon after the verdict was issued by the Administrative Court, which rules in disputes between citizens and the government, the government gave Uber and Careem six months to apply for licences. The measure passed in May put forward conditions, including stipulating that ride-sharing companies must obtain 5-year renewable licences costing 30 million Egyptian pounds ($1.7 million). Drivers must also buy special licences to operate.

While Uber and Careem largely welcomed the new law, which Uber described as “progressive regulations” in an official statement, concerns remain about data sharing.

Abdellatif Waked, Uber’s general manager in Egypt, said the company was keen to ensure the protection of clients’ privacy. “We cannot actually share the information of our clients without a court order,” Waked said.

Behind the government’s insistence for ride-sharing companies to share clients’ information is Egypt’s war against terrorism, security experts said. There are fears terrorists could use Uber and Careem in Egypt, which, unlike ride-sharing services in many other countries, allows clients to pay by cash, to escape security monitoring.

“This is why it is important for the two companies to share information about their clients, especially those wanted or followed by security agencies,” said Hamada al-Qest, a member of the Egyptian Parliament’s Defence and National Security Committee. “Terrorist elements can use these apps in staging terrorist attacks that will harm everybody, including the business of the two companies.”

The issue of data sharing was at the centre of parliamentary debate on the ride-sharing measure. Some lawmakers advocated a more laissez-faire attitude, fearing a potential negative effect on foreign investment.

Uber and Careem have been a major boon for employment. Uber has said Egypt was its largest market in the Middle East, with 157,000 drivers in 2017 and 4 million users since its launch in 2014.

Questions remain as to how the new fees — drivers will have to pay $170 to acquire an operational licence — will affect the ride-sharing business.

“These are huge amounts of money,” Gaafar said. “The drivers cannot pay this money and, if we pay it for them, we will have to raise the fares, which will ultimately cause us to lose clients.”