Uber seeks court's help to stop State regulation of digital taxis

 Ride-hailing apps that will not have obtained a licence by September 18 will be inaccessible to drivers and passengers. [iStockphoto]

Ride-hailing firm Uber has moved to court to challenge new regulations giving National Transport and Safety Authority (NTSA) powers to regulate digital taxis.

Uber in its case filed before the High Court argues that the requirement for firms offering transport through mobile apps to apply for a transport network licence is illegal as it lacks parliamentary approval and was not subjected to public participation.

The San Francisco-based firm in court papers contests the regulations gazetted on June 20, 2022, in which NTSA requires that transport network companies and transport network service providers be licensed before their apps can be used in the country.

“The regulations intended to give the second respondent (NTSA) powers to issue licences to transport network companies and to regulate, among others, the requirements by these companies for application for transport network licences,” Uber’s lawyer Cecil Kuyo told the court.

According to the regulations, ride-hailing apps that will not have obtained a licence by September 18 will be inaccessible to drivers and passengers.

“I believe that it is impossible for the petitioner (Uber) or any aspiring applicant to apply for a transport network licence from the second respondent as there are no prescribed forms that have been provided in the regulations,” said Mr Kuyo.

Uber argued that it is a technology provider and that the drivers who opt to work through the platform do it of their own free will.

According to Uber, the interlink service offered by its platform only enables the transfer of booking information between the driver and the passenger.

While faulting NTSA for allegedly overstepping its mandate, Uber claimed the regulations “erroneously assume” that it is a transport company that owns vehicles.

“The intermediation service offered by the petitioner that enables the transfer, by means of a smartphone application, of information concerning the booking of a transport service between the passenger and the driver is not within the remit or scope of the NTSA Act, which provides powers and functions of the second respondent,” said the company in court papers filed last Friday.

“The petitioner does not own vehicles or provide vehicles for the transportation service to be provided through the Uber app, nor is it responsible for covering any other costs such as fuel or other costs that drivers may incur in providing services.” 

The ride-hailing firm also argued that NTSA did not follow the law in developing the new regulations.

For instance, Uber said, they were never tabled in the National Assembly for debate.

“Given the first respondent failed to ensure that a copy of the regulations was transmitted to the responsible clerk for tabling before the relevant House of Parliament within seven sitting days after their publication on or before June 27, 2022. The regulations ceased to have effect immediately after June 27, 2022 and are consequently null and void.”

Uber claimed that NTSA did not seek authorisation from the Transport Cabinet Secretary before gazetting the regulations.

It also argued that NTSA has illegally capped the commission to 18 per cent, which is not realistic under the prevailing market conditions.

“Restricting flexibility on the petitioner’s revenue models and stifling its ability to negotiate suitable commissions will restrict its ability to compete and innovate to the detriment of customers, drivers, and local entrepreneurs in the transport sector and ultimately the growth of the transport sector,” said Uber in court papers.

The firm currently takes a 25 per cent commission on the total fare charged for each trip.

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