Egypt’s president approves law for ride-hailing apps

In this Feb. 10, 2015 file photo, an Uber employee shows the mobile application at the official launch of the car-hailing service, in Cairo, Egypt. (AP)
Updated 24 June 2018
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Egypt’s president approves law for ride-hailing apps

  • El-Sisi approved a law governing popular ride-hailing apps Uber and Careem
  • The law establishes the basis for operating licenses and fees

CAIRO: Egypt’s President Abdel-Fattah El-Sisi approved a law governing popular ride-hailing apps Uber and Careem after the companies appealed a court ruling that revoked their licenses, the country’s official gazette reported Sunday.
The law establishes the basis for operating licenses and fees, and requires licensed companies to store user data for 180 days and make it available to Egyptian security authorities upon request.
There was no immediate comment from Uber and Careem. Both companies, however, had welcomed the draft law when parliament approved it in May.
Both companies provide smartphone apps that connect passengers with drivers who work as independent contractors. In March, an Egyptian court deemed it illegal to use private vehicles for taxi services and ordered Uber and Careem’s apps to be blocked. But another court overruled that ruling in April, and both companies have since continued operating. The Supreme Administrative Court on Saturday adjourned the appeal to August 25.
Data privacy is a major concern for Uber in its dealings with the Egyptian government. The strict new European General Data Protection Regulation law comes into effect on May 25 and is expected to impact its operations worldwide.
Uber was founded in 2010 in San Francisco, and operates in more than 600 cities across the world. Careem was founded in 2012 in Dubai, and operates in 90 cities in the Middle East and North Africa, Turkey, and Pakistan.
The applications took off in Cairo, a city of 20 million people with near-constant traffic and shrinking parking space. The services have recently started offering rides on scooters and tuk-tuks, three-wheeled motorized vehicles that can sometimes squeeze through the gridlock.
The apps are especially popular among women, who face rampant sexual harassment in Egypt, including from some taxi drivers. Cairo’s taxi drivers are also notorious for tampering with their meters or pretending they’re broken to charge higher rates.
In 2016, taxi drivers protested the ride-hailing apps, complaining that their drivers have an unfair advantage because they don’tt have to pay the same taxes or fees, or follow the same licensing procedures.


Oil markets jittery over lower demand forecasts

Updated 18 November 2018
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Oil markets jittery over lower demand forecasts

RIYADH: Oil prices continued to nosedive last week over demand concerns amid an outlook of a slowing global economy. The strong US dollar weighed on both oil prices and the global demand outlook. Currencies weakened against the dollar, eroding their purchasing power.
Brent was down to $66.76 per barrel and WTI dropped to $56.46 per barrel by Friday. The former came close to its one-year low as both the International Energy Agency (IEA) and OPEC released monthly reports that articulated a darkening demand outlook in the short term. This increased fears of an oil demand slowdown. Market fundamentals also suggest that price volatility is likely to remain high in the near-term, although the oil market reached a balance in early October.
OPEC’s Monthly Oil Market Report (MOMR) arrived with bearish sentiments, revising downward its oil-demand forecast for this year and next, for the fourth month in a row. It forecast that global oil demand will rise by 1.29 million barrels per day (bpd) in 2019, 70,000 less than what OPEC expected last month. The MOMR also forecast increasing non-OPEC supply growth for 2019, with higher volumes outpacing the annual growth in world oil demand, leading to an excess in supply. The report was welcomed with open arms by the IEA, which had been at least in part responsible for driving sentiment toward a bear market. Surprisingly, OPEC warned that oil demand is falling faster than expected. Necessary action is a must.
Saudi Arabia is not sitting idly by while oil markets look as if they are heading toward instability. Markets were expecting severe US sanctions on Iran, which could have resulted in supply shortages once Iran’s crude exports went to zero. The unexpected introduction of waivers to allow eight countries to continue importing Iranian oil, was however an eye-opener. Now, as the world’s only swing producer, Saudi Arabia will have to take other measures to balance oil markets and drain excess oil from global stockpiles.
Despite what some analysts are claiming, there is currently no strategy to send less oil to the US to help reduce US stockpiles. Yes, some have claimed that Saudi crude shipments to the US are at about 600,000 barrels per day this month, which is a little more than half of what was being shipped in the summer months. But the reasons for this are related to seasonally low demand, the surge in US inventories and refineries heading into their winter maintenance season. Remember that November crude oil shipments were allocated to the US refiners last month before the US waivers on the Iranian sanctions were revealed. Also, keep in mind that Saudi Arabia owns the largest refinery in the US, which has a refining capacity that exceeds 600,000 bpd.

Lurking on the horizon is the massive US budget deficit and increasing rumblings that the US economic boom is over. 

It must be noted that there is a degree of financial manipulation underway in the oil futures markets. At the moment, there are few places where quick profits can be made, so some investors moved from stocks to commodities. Now, there are downward pressures on oil prices as some commodities market traders went long on oil futures, thinking that crude prices would rise. Then these same traders shorted natural gas, assuming that with a warmer winter, prices of that fuel would fall. Unfortunately for the traders, Trump’s sanction waivers on Iranian crude oil exports and cold weather on the US East Coast, caused exactly the reverse to take place. Oil prices fell and natural gas prices rose. Traders were therefore forced to sell their assets to cover margins, pushing oil prices lower. It is expected that some hedge funds and investment funds will also be moving away from going long on oil futures and this will cause further selling.
Lurking on the horizon is the massive US budget deficit and increasing rumbling that the US economic boom is over. The US federal budget deficit rose 17 percent in the 2018 fiscal year. It is now larger than in any year since 2012. Federal spending is up and amidst US President Donald Trump’s tax cuts, and federal revenue is not keeping pace. To make matters worse, the strong US economy and interest rate hikes by the US Federal Reserve have boosted the dollar.
A strong dollar makes commodities such as crude oil more expensive in international markets and reduces demand. Trump wants oil to be priced as low as possible to help bolster the US economy, which is clearly under strain, and to facilitate sales of crude abroad. But with a looming global oil shortage just a few years away due to a lack of upstream investment, it is incumbent on global oil producers to consider the long term in their output decisions.

* Faisal Mrza is an energy and oil market adviser. He was formerly with OPEC and Saudi Aramco. Reach him on Twitter: @faisalmrza