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Monday, 4 December 2017

Ride-hailing apps will be required by law to ensure taxis make up half of their fleets; Careem eyes expansion in Egypt, Swvl looks raise funds for expansion in MENA and beyond

From the Department of Legislative Insanity: Pending legislation may require ride-hailing apps to ensure taxis make up half of their fleets. A number of details have emerged on the Ride-hailing Apps Act that some in the industry claim will significantly disrupt operations. Among the most “disruptive” of these articles are provisions that would require ride-hailing companies such as Uber and Careem to ensure that half of their fleet be made up of white taxis. This ludicrous intrusion, which defeats the purpose of ride-sharing by turning the operators into part-time cab companies, would be tricky to implement considering the standards required by ride-hailing companies are definitely not the mainstay of the average cab driver. It would also be tough to implement as the law places a six-month deadline for companies to comply with its regulations. Careem has seen the writing on the wall and begun hiring taxi drivers for its fleet about a year ago. The regulations would also bar companies from sub-contracting or hiring car rental services for their fleets.

Other elements of the law which appear to favor cab drivers is a licensing pricing scheme that charges drivers fees of 125% higher than those of cabbies. A number of Uber drivers speaking to Al Borsa said that the fees, which could reach up to EGP 1,125 per driver, will discourage many from continuing to drive for ride-hailing apps. Ride-sharing drivers will also be required to obtain a special license plate. The law would also allow up to three drivers to operate a single car.

As for data requirements, company servers that house user and driver data must be stored in Egypt, the newspaper says. This appears to confirm a New York Times report in June, which also alleges that law requires companies share that data with authorities.

In other ride-sharing news, Careem announced that it plans to raise its investments in Egypt to USD 75 mn over the coming three years as part of an expansion plan in the country, said Careem Egypt CEO Ramy Kato tells Al Borsa. The expansion will see 100k drivers working for the company by 1Q2018 as it expands to new governorates. The company will also launch shipping and cargo transport services, Kato added.

Swvl raising funding, eyes international expansion: Meanwhile, bus transport service platform Swvl plans to launch services in Saudi Arabia, Jordan and Pakistan in 2018, said company founder Moustafa Kandil. He tells Al Mal that the company, which currently only operates in Cairo and Alexandria, is also looking to other emerging markets and is raising another round of funding. Back in July, Careem had invested USD 500K for a minority stake in Swvl.

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