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Monday, 28 January 2019

Something is happening with Uber in Egypt

EXCLUSIVE- What’s going on with Uber? Multiple people we have surveyed since Sunday morning have reported that Uber, the global ride-hailing app, has been unusable in the Greater Cairo Area in recent days. One user was unable to sign into a previously functional account, while most of those complaining have reported extended periods in which no rides (represented by small car icons) were visible on screen. Others were unable to enter a destination for their desired ride.

Twitter is on fire with similar complaints, with dozens of Uber users taking to the social media service in the past 48 hours to complain about service outages, difficulty logging in and difficulty getting rides.

Competitor Careem appears to be operating normally. We found no Careem users with unusual complaints in person or on Twitter. A number of grumpy Egyptian clients of Uber reported on Twitter that they had taken to using Careem instead.

We reached out to representatives of Uber seeking comment, but have yet to hear back.

Is a regulatory issue at play? It’s entirely possible this is a technical glitch that has lasted for nearly 24 hours. But one source close to the industry, who declined to speak for the record, drew a line between the outage and what the source said is ongoing friction over unspecified “changes” to the still-not-released executive regulations to the ride sharing law. The House of Representatives passed the act last year and the executive regulations had been expected by the end of 2018. We reported last week that the latest point of contention sees the industry pushing back against a ‘new’ proposal for a EGP 2-5 per-ride levy.

Court to rule on Uber / Careem appeal on 23 February: All of this comes as the Supreme Administrative Court reserved to 23 February its decision in an appeal by Uber and its competitor Careem against a lower court ruling ordering the suspension of their operations, according to Al Mal. The ride-hailing companies’ appeal claimed that the delay in issuing the executive regulations of is “obscuring” their legal status.

Uber and Careem have also been warned against merger talks. The Egyptian Competition Authority told the two that a prospective combination of their businesses could violate Egypt’s competition act. Neither company has confirmed the merger talks, originally reported by Bloomberg, are in fact underway.

This is a disaster, right? Not necessarily. Uber and rival Careem are test cases for a new regulatory reality in Egypt. Amid ride sharing, new concentrations of corporate power and the emergence of new (to Egypt) non-bank financial services, regulators are working overtime to sort out the rules of fair play in an Egyptian context. It is easy, in an emerging market, to position any new regulation as government overreach (at best). But the simple fact is that the regulatory ‘renaissance’ through which our economy is passing is not unlike waves of regulation that have swept developed markets since the ‘progressive era’ in the United States at the turn of the last century. Those waves have banned child labor, established workplace health and safety regulations, defined what is and isn’t monopolistic behavior — you name it.

So we shouldn’t be running for the exits if Uber is, indeed, being blocked? Not yet. Speaking for our 2019 CEO Poll (coming soon, by the way), Matouk Bassiouny founding partner John Matouk told us that regulatory change and enforcement would be among “the” stories of 2019: “New laws are out and the regulatory authorities working through that very proactively as they assert their role. This is ultimately a very healthy thing. We’re going through a very natural grey area period until there’s clarity and visibility on where the private sector stands in terms of the new laws and regulations and their interpretation and implementation by the regulatory authorities. Once the dust settles and clarity and visibility are provided, investors will start coming in.”

Uber is one of those investors: The company, whose CEO has met President Abdel Fattah El Sisi on two occasions, chose to launch its bus service in Egypt.

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