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Wednesday, 21 March 2018

Administrative Court orders shut down of ride-hailing apps Uber and Careem, companies plan appeal

Taxi drivers have won an initial court victory over Uber and Careem: The Administrative Court ordered yesterday the suspension of licenses for ride-hailing apps Uber and Careem,judicial sources told Reuters. The case was filed by 42 taxi drivers seeking to shut down the operations of both platforms, claiming the ride-hailing services were illegally using private cars as taxis. Lawyer Khaled al-Gammal, who represents the plaintiffs, “said the court suspended the two companies’ licenses, banned their apps and suspended the use of private cars by the two ride-hailing services.” A spokesperson for the taxi drivers is claiming that the order goes into immediate effect, Al Mal reports.

Both companies say they will continue operating; Uber plans appeal: Uber plans to appeal the decision within the permitted 60-day window and “remain available in Egypt in the meantime,” as the company is “fully committed to working with the entire sector – including taxis – to improve mobility in Egypt together,” a spokesperson told the newswire. It also appears to be business as usual for Careem, which is also widely expected to appeal, but has said it had not received any official notice to cease its Egypt operations. Al Mal claims to have obtained a message the company sent its drivers stating unless it receives an official cease and desist, the company will continue operations.

Just like with the ergot ruling and Tiran and Sanafir, the Administrative Court appears to have gotten ahead of itself. New legislation to govern the activities of ride-hailing apps such as Uber and Careem is in the works. Last we heard, the law had been pending sign-off from the Ismail Cabinet before it goes to the House of Representatives; the Council of State concluded its review of the bill in January. With political support in both the government and parliament for the sector, look for reasonable odds of the verdict being overturned on appeal.

The story is dominating international coverage of Egypt this morning, with The Associated Press, Xinhua, and Al Arabiya all picking up the story.

The silver lining: It’s being portrayed as part of a global “Uber vs. Taxi drivers” and not “Egypt vs. Business” story. “The case builds on a long-festering dispute between taxi drivers and their ride-sharing counterparts. The taxi drivers have repeatedly complained that they are forced to shoulder licensing costs not borne by Uber and Careem,” writes Tarek El Tablawy for Bloomberg, which is the general consensus of the coverage. Nearly all are noting the importance of Egypt to the companies and plans to expand there.

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