Taxi brokerage app licensing terms issued on national platform

Taxi brokerage app licensing terms issued on national platform

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The terms and conditions for licensing taxi brokers through apps has been issued on Istilaa, the national platform for public consultant, to ensure that all opinions are submitted to prepare for a new law.

Amid a popular demand for ride-hailing services, the Kingdom needs an updated legal framework to regulate all the aspects of the industry and to ensure that consumers are receiving a proper service.

In today’s article, we will focus on the main clauses tackled in this draft.

First, the law draft states that businesses cannot broker for taxis on mobile apps without obtaining a license, which has to be renewed whenever it expires, is cancelled or suspended.

To acquire a license, the entity has to submit a request through the Transportation Authority, gain a commercial register that includes the activity and secure a trademark registration certificate for the app in case the brand name differs from the legal name.

Each business will also require a financial guarantee amounting to SR250,000, a social security certificate and a Zakat and income certificate.

The applicant will also need to demonstrate its competency to provide taxi app brokerage services, which could be achieved through its business history or an overview of its capabilities.

The license is issued by the authority in the name of the establishment or the legal entity for a period of three years, and the activity may not be performed after its expiry, cancellation, or during any period of suspension.

The licensee’s ability to deliver taxi services is limited to the following parties: Drivers who are licensed to engage in public fare activity, drivers who are licensed to engage in family fare activity and those authorized via an authorization to engage in public fare activity.

There has to be a valid contract between the licensee and the contracting parties, which shall not extend beyond the validity period of the license.

In our next article, we will elaborate more on the duties and obligations imposed on licensed companies or legal entities in providing these transportation services.

Dimah Talal Alsharif is a Saudi lawyer and legal consultant. Twitter: @dimah_alsharif


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