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Palestinian Authority Bans Ride-hailing Firm, Careem

By Dima Abumaria | The Media Line

October 13, 2017

(Photo: Getty Images)

Taxi drivers complain about the competition

The Palestinian Authority (PA) Ministry of Transport and Communications has banned the Dubai-based ride-hailing firm Careem, claiming that it operates illegally.

PA Transport Minister Samih Tbaila clarified in a press release that Careem violates traffic regulations since the chauffeur-driven booking service does not have a public transportation license that enables it to carry passengers for a fee.

Careem was founded by Mudassir Sheikha, from Pakistan, and Swede Magnus Olsson and has since surpassed Uber as the biggest ride-hailing company in the Middle East. Its mobile telephone application operates in 12 countries in the region, allowing people to summon a car and driver at cheaper rates than regular taxis.

The PA is the first government to ban Careem and made the move following protests by local taxi drivers. “We have lost about 30 percent of our income since its introduction,” Ala’a Kzazha, who runs a taxi company in Ramallah, told The Media Line. “Our expenses are high and Careem’s prices are half what we charge. That is their strategy; they start with cheap prices then they go up. They did the same thing in Jordan,” he asserted.

Salwa Al-Qattan, Careem’s Communications Manager in Jordan, confirmed to The Media Line that the ride-sharing service has faced similar types of regulatory issues in other places and is in the midst of discussions with the PA Transport Ministry.

In Ramallah, Dina Azouni, 22, expressed her satisfaction with the application.  “Careem is much less expensive than taxis and the cars are modern and clean. The company is helpful and safe, your family and friends can track your trip,” she told The Media Line.

Since launching a pilot project in Ramallah and Birzeit, Careem has signed up hundreds of drivers who work in their spare time. One such chauffeur, who spoke to The Media line on condition of anonymity, believes the ban in the PA is unfair. “This service is available in the whole world, why do they have to outlaw it in Palestine?” he questioned.

Other drivers, or Captains as they are known, stressed that working in their free time allows them to generate much-needed additional income in the absence of other viable alternatives.

One Captain went a step further, suggesting to The Media Line that one of the reasons for the ban is that certified taxis need to pay the government in order to operate, whereas this is not the case with Careem. “I think big people in the PA are asking for a share [in the profits] as they have to have their hands in every business.”

Over the summer, Careem bought a stake in a three-month-old Egyptian start-up for five hundred thousand dollars. That company provides a bus service, whereby passengers can reserve and pay their fare through a mobile application. By knowing the customer’s location and intended destination, the system computes the shortest possible journey from the nearest bus station.

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