Uncertain future for US ride-sharing company in Egypt

Uber’s withdrawal from the market would affect thousands of its stakeholders, its clients and drivers the company uses.
Sunday 19/05/2019
Uber’s largest market in the Middle East.  An Uber employee assists a driver at the company’s headquarters  in Cairo.    (AFP)
Uber’s largest market in the Middle East. An Uber employee assists a driver at the company’s headquarters in Cairo. (AFP)

CAIRO - There is uncertainty over the business prospects of US ride-sharing company Uber in Egypt after Egyptian authorities asked the company to meet specific security standards.

Authorities, Uber said in a notice to stakeholders, want the company to share certain personal information to be allowed to operate in Egypt. Uber said failure to share that information with the authorities could result in fines or penalties.

This announcement came less than two months after Uber acquired Careem, which was its strongest rival in the Egyptian market. Uber’s $3.1 billion acquisition brought attention to its plans in Egypt.

Uber became the first company to offer ride-sharing services in Egypt in 2016.

When Uber made its Egyptian debut, the country did not have laws regarding ride-sharing but in June 2017 Egypt enacted a law giving ride-sharing companies the right to operate in the country. The law requires ride-sharing companies to make their databases available to government agencies.

Security analysts said this was an important requirement for Egypt to be able to address security threats and track people who may pose a danger to the country.

“Companies that make information available to the authorities help (the country) prevent terrorist attacks,” said retired police General Ashraf Amin.

Egypt has been working to curtail terrorist activities, having come under attacks by a branch of the Islamic State and militias affiliated to the Muslim Brotherhood.

The law regulating ride-sharing companies stresses the need for making information available to the security forces but the measure also stipulates that the companies must protect the privacy of their databases.

There are fears that the requirement that the companies provide client information would impinge on customer privacy and could lead to the ride-sharing firms withdrawing from Egypt.

“As a company, Uber follows international standards but the company can pull out of the market and operate anywhere else if it fails to apply these standards here,” said Egyptian rights advocate Hafez Abu Saeada.

Abu Saeada said authorities have the right to ask companies operating in Egypt to share information when they suspect someone of wrongdoing, although this must be done through a request from the prosecuting attorney’s office.

Uber’s withdrawal from the market would affect thousands of its stakeholders, its clients and drivers the company uses.

Uber and Careem out-competed Egypt’s black-and-white taxis when they entered the market three years ago by offering different and better services.

The ride-sharing business perked up car sales and provided jobs to thousands of Egyptians who bought new cars and worked for the two companies.

Drivers give the ride-sharing companies 25% of their daily revenues in return for using company applications. However, the future of the contractors is uncertain, with Uber expressing reservations about the information-sharing requirement.

The company said in its notice to stakeholders that it might not be ready to share information with authorities. It added that failure to do so could lead to the suspension of its application.

19