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Vehicles with a commercial license plate can no longer engage with ride-hailing services, according to a new directive issued by the City Administration.

The Addis Abeba City Administration Transport Bureau issued a directive, dubbed the ”Electronic Taxi Dispatch Service Control Directive,” two weeks ago that reserved taxi-hailing services for only code-01 vehicles.

The directive, which has been in the making for the past year, focuses on administering taxi services that use information systems to connect customers with drivers.

The new directive also requires taxi service providers to obtain an exclusive license from the Transport Bureau before operating taxi-hailing services.

Modernisation of the taxi system and technological advancements in taxi-hailing services has triggered the drafting of the directive.

“Thus, there is a need to establish a legal and formal framework that will oversee the service,” reads the directive.

Taxi-hailing services were introduced in 2017 with only a few companies in operation. Now the number has grown to 10 companies, which use both internet and phone-based platforms to link drivers with passengers.

While the use of the technology was good, the service remained unregulated, according to Solomon Kidane (PhD), economic cluster coordinator of the city with the rank of deputy mayor.

The taxi-hailing companies used to work with the yellow taxis that were imported with duty-free privileges. Later, private and commercial automobiles joined these service providers. Though the city’s transport law prohibited the use of Code-03 plates for taxi service, the automobile owners continued working with these companies.

Last year Hybrid Designs, developer of the Ride taxi-hailing platform, entered a rental agreement with commercial vehicles owners and integrated them into its system. The owners of commercial vehicles obtained a car rental business license before entering an agreement with the company.

However, the company’s move was deemed illegal by the City Administration, who argued that the vehicles violated the commercial law by using code-03 cars as public transport vehicles without the proper licenses from the City Transport Authority.

Then the City Administration banned the issuing of Code-03 plates temporarily until it came up with a law to regulate the sector.

Three months ago Addis Abeba Vehicles License & Control Authority resumed issuing the code-03 plates, giving a chance for new drivers to join the industry.

However, the latest directive effectively puts a stop to all the vehicles with code-03 plates from engaging in ride-hailing services.

Taxi transport service was already reserved for code-01 taxis, and the new directive simply introduces enforcement procedures, according to Solomon.

Code-01 taxi service providers are supposed to fulfill some criteria to join taxi-hailing services, such as being painted yellow or blue and committing to provide the service for at least a year.

The service providers are also supposed to give information about the details of their operation and give read-only access permission of their database to the Bureau so that the City Administration will be able to track their movement.

Companies caught for the first time using vehicles with a commercial plate for ride-hailing services will be fined 3,000 Br, and the fine will be doubled if they are found doing it a second time. Their license will be revoked along with a 10,000 Br fine if they are found committing the offence for a third time.

Though the directive is stringent, it will create a level field for the different taxis in the capital and promotes free competition, according to Solomon.

Fikadu Gurmessa (PhD), a transport geography lecturer at Addis Abeba University, disagrees with the move.

He argues that the sector should be free for all drivers and vehicles that fulfill the required criteria.

Instead, the Bureau should have established an alternative system in which different license plate vehicles, upon passing certain government requirements, would be allowed to provide the service, according to Fikadu.

However, he stands with the new requirements laid out by the city officials.

“The requirements and standards are necessary, since the procedures of obtaining a license for driving a taxi and providing public transport should be different than obtaining a license for driving cars for personal use,” said Fikadu.

Source of original article: (Addis) Fortune – The Largest English Weekly in Ethiopia! (
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