CAIRO (Reuters) - Egypt suspended the licenses of ride-hailing companies Uber and Careem on Tuesday, in a court ruling after taxi drivers sought to shut down the two firms’ operations in the country, judicial sources said.
Forty two Egyptian taxi drivers filed a lawsuit a year ago against U.S.-based Uber and its Dubai-based competitor Careem, arguing they were illegally using private cars as taxis. They also claimed that the two firms were registered as a call center and an internet company, respectively.
Khaled al-Gammal, a lawyer acting for the taxi drivers, said
the court suspended the two companies’ licenses, banned their apps and suspended the use of private cars by the two ride-hailing services.
Tuesday’s decision was effective immediately, meaning the companies must suspend services pending a final ruling, although the companies have 60 days to appeal, the judicial sources said.
Uber said it would appeal and it was not immediately clear when a final ruling would be issued.
Careem said it had not yet received any official request to stop operations in Egypt, and continued to operate as normal.
Uber intends to appeal any court decision to suspend ride sharing licenses in Egypt, an Uber spokesperson said.
“We will do all we can to ensure millions of Egyptians can continue to enjoy the benefits of on-demand transportation,” the Uber official said.
“We are fully committed to working with the entire sector – including taxis – to improve mobility in Egypt together. We will appeal this decision, and continue to be available in Egypt in the meantime.”
Uber said Egypt is its largest market in the Middle East, with 157,000 drivers in 2017 signed up and 4 million users having used the service since its launch there in 2014.
The San Francisco-based company said last year it was committed to Egypt despite challenges presented by sweeping economic reforms and record inflation. In October Uber announced a $20 million investment in its new support center in Cairo.
It has had to make deals with local car dealerships to provide its drivers with affordable vehicles and adjust its ride prices to ensure its workers were not hit too hard by inflation.
Egypt is one of Uber’s fastest-growing markets, its general manager in the country, Abdellatif Waked, has said, according to state news agency MENA.
Egypt’s investment ministry said last year that a draft law regulating web-based transport services would provide a legal framework for companies like Uber, but did not say when that bill was likely to be passed.
Uber has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services. It has been forced to quit several countries, such as Denmark and Hungary.
Last year, London deemed Uber unfit to run a taxi service and stripped it of its license to operate. Uber is appealing against the decision.
Reporting by Omar Fahmy, Haitham Ahmed, Arwa Gaballa and Eric knecht; Editing by Edmund Blair/Adrian Croft/Susan Fenton