Uber, Careem stuck in Cairo legal gridlock

Egyptian taxi drivers were less than enamoured by the arrival of Careem and Uber on the streets of Cairo. (Reuters)

• Under pressure to share their customer data with the authorities they also face opposition from traditional taxi companies.
• New draft law has also stirred controversy in the capital because of fears that it will increase fares and restrict drivers.

CAIRO: The runaway growth of Uber and Careem in Egypt threatens to turn to gridlock as the pair try to navigate though new rules that have provoked a storm of controversy.
Now thousands of drivers who depend on the company for work fear their livelihoods will be affected by new regulations.
The pair are fighting a battle on two fronts in one of the region’s fastest growing markets.
Under pressure to share their customer data with the authorities they also face opposition from traditional taxi companies who fear their livelihoods are now under threat.
“We need to avoid high tariffs for the companies so that it doesn’t affect the financials of the drivers. If the driver is affected, prices will rise, and hence the rider will be burdened.
“We need to achieve the right equilibrium of having operating fees but within the normal ranges,” said Ramy Kato, managing director of Careem in Egypt.
The new draft law has also stirred controversy in the capital because of fears that it will increase fares and restrict drivers.
It would also require Uber and Careem to house their servers inside Egypt and to link their data to “relevant bodies” in government — a move considered by many drivers and customers to be a breach of privacy.
Uber and Careem drivers expressed anger over the new regulations which includes the power to jail drivers without the correct legal documents.
It also prevents government employees from working for Uber and Careem. Many public sector workers in Cairo top up their salaries with driving work.
The problems for the two companies started last month when an Egyptian court issued an order banning them from operating for using privately-owned vehicles for commercial purposes.
The case was filed against the two operators as well as the government.
Judicial sources said that the court decision would be implemented and that the companies must cease their services pending a final ruling.
“Amid several protests from the taxi drivers with no official response, those drivers decided to direct their issue to the court and that’s why I helped them,” said Khaled El Gamal, the lawyer who filed the widely-reported case against Uber and Careem.
“For seven years, some 300,000 taxi drivers faced a lot of issues. Then came Uber in 2013 to make their problems even worse and those foreign companies had no licenses to operate in Egypt.”
The doubts hanging over the companies’ operations in Egypt is giving the city’s army of private drivers sleepless nights.
“I left my call center job to have my own business,” said Osama Ahmed, a Careem driver. “This is the source of my income today.
“My business with Careem has been growing and I have become solely dependent on it.”
Passengers who depend on the pair to navigate through the city’s notoriously congested streets are also worried about the impact the draft law could have on fares as well.
Cairo is one of Uber’s fastest growing markets with more than 40,000 drivers in 2016. Last year Uber was adding as many 2,000 drivers a week in the country.
Despite what appears to be a bleak outlook for Uber and Careem in North Africa’s most populous city, the pair are used to navigating around regulatory roadblocks.
“We have seen the same scenarios in each of the 13 countries we are operating in and we usually resolve and clear issues through discussions,” said a sanguine Kato.