Ahmed Ismail, a 30-year-old engineering student at a private university, needed money for his wedding so he looked for a high-income job also suitable for a student’s life. On Facebook, he came across a job opportunity with a monthly income of L.E. 10,000 (US $1,125) for part-time work. The only requirement was a modern car. His father helped out and bought his son a new car and asked Ahmed to pay the installments from his new income.

Ahmed Ismail, a 30-year-old engineering student at a private university, needed money for his wedding so he looked for a high-income job also suitable for a student’s life. On Facebook, he came across a job opportunity with a monthly income of L.E. 10,000 (US $1,125) for part-time work. The only requirement was a modern car. His father helped out and bought his son a new car and asked Ahmed to pay the installments from his new income.

The other catch was that Ahmad had to move to Cairo from Ismailia because his new job only did business in Cairo and Alexandria, the two mose populous cities in Egypt.

“I bought the car and went to the job advertisers in Cairo,” said Ahmed. “It was a car rental agency working for Uber, (a U.S. company with a branch in Egypt), practicing as a technology company. In other words, its mandate has nothing to do with transportation. To solve this legal issue, it had to make agreements with car rental agencies to get modern cars working under authorization from these agencies as rented for Uber.”

Good treatment

Ahmed was not concerned with the company’s legal form since its representatives treated him well. They trained the drivers how to respond to customers who  ordered taxis, which were nearest to them, through a mobile app. “Things went awesome. The company would give me and my senior colleagues financial incentives whenever customers gave us high ratings,” he added.

The new transportation concept brought about by companies such as Uber made many customers happy. For example, Noureddin hailed the idea, saying: “Uber saved us from the taxi drivers’ moodiness and their obsolete cars, which lack air conditioning. We had to wait for a long time and hail many taxis until one finally gave us a ride. Some drivers will even rig the meter or ask for higher fares. Uber people would never do any of that. It has good cars and we know the cost even before we go into the car. The drivers behave well to earn high ratings.”

End of a good thing

Ahmed moved on to work in another company called Karim seeking the additional incentives it promised in its advertisements. However, several months later, the company started to received so many job applications that they became very choosy. Ahmed said the company delayed the payment of his wages many times and took 20 percent of the fares while the drivers took the rest after paying a monthly sum of L.E. 300 (US $34) to the car rental agencies which act as brokers.

In addition to the payment delays, says Ahmed, the company does not provide the drivers with any legal protection. He had an accident and paid about L.E. 13,000 (US $1,463) to repair his car and the company did not contribute to the costs. He explains that he cannot file a lawsuit because the company is not subject to any legal framework.

“The company is just a broker”

Islam Fattouh, an official at Karim Company, confirmed some of Ahmed’s statements and denied others. “The company has never delayed paying the drivers’ wages,” says Fattouh. “The moment the drivers finish their work, the company pays their wages to the car rental agencies, which might indeed delay payment. The company has built a reputation which is so keen to maintain and thus will not sack any of the drivers who started working since its establishment.” On the other hand, he admitted that Karim company does not provide any legal protection, stressing that it is a technology company acting as a broker between the drivers and passengers through car rental agencies and has nothing to do with the drivers and the authorization issued by these agencies makes it very clear that the company is not to pay for any damages.

Some white-taxi drivers (official taxis) consider the drivers of Uber, Karim and similar companies as enemies stealing their customers. “Uber has been a real curse; it stole our customers. It does not pay taxes, insurance or any fees to get car plates. Every time, we catch one of those drivers and take him to the police because private cars are not allowed to serve as taxis, he gets out on the pretext that the cars are rented by a car rental agency,” said Mahmud Abdulrahman, a white-taxi driver.

Mustafa Al-Sayed, another white-taxi driver, disagrees with Abdulrahman, saying: “Everyone has their own share of the market, and our customers are different from theirs. When drivers do their work properly, everyone will be satisfied.”

Ahmed comments: “The problem is that people think we earn L.E. 10,000 (US $1,125) a month, which is not true. Even the drivers of the best cars barely earn L.E 5,000, of which they pay L.E. 1,000 to the company and L.E. 300 to the car rental agencies and thus they are only left with L.E. 100 a day which is not enough to cover the expenses of the drivers and their cars. If I had money, I would buy a taxi plate and work independently instead of waiting for the customers’ calls. The concept is not that new; people had for ages been renting cars from car rental agencies to move inside Cairo. Therefore, Uber and Karim did not break new grounds. I am pretty sure that the owners of those companies are the ones who caused the crisis between us and the white-taxi drivers to promote their services.”

“I am not saying that these companies did not provide jobs for me and my colleagues who include doctors and engineers. Now I have an income which enables me to spend on my studies and my wife. However, what I do not accept is that these companies are earning millions and paying the state none. They make money very easily simply because they developed a mobile app. They neither pay taxes nor protect their drivers and we have no choice as there are very few job opportunities available,” he adds.

The state ought to intervene

To address the legal issue, Ahmed suggested that the state should intervene as a mediator between the drivers and these companies. Thus, the state could get regular revenues and monitor the actual number of cars working with these companies (more than 20,000 cars according to Ahmed). As a result, the state would collect taxes from these companies which operate passenger cars rather than mobile apps whose taxes are very low as is the situation now.

The Egyptian Prime Ministry created a committee to find a solution for this problem. The committee recommended that these companies are subjected to the Egyptian laws to protect the interests of all parties and preserve the people’s right to choose the appropriate transportation means, the right of white-taxi drivers to work and make a living and the right of the state to collect taxes and insurance fees. It also recommended that legislations are amended to regulate the work of transportation companies using information technology. The Minister of Judicial Affairs and the Council of Representatives were tasked with making these legal amendments after reviewing similar legislations in other jurisdictions. Yet, no measures have been taken in this regard.