Punjab Government’s Provincial Transport Authority on Monday declared that ride-hailing services Uber and Careem were operating outside regulatory bounds in Lahore.

A notification was issued in this regard to the Chief Traffic Officer of Lahore and to the Chief Executive Officer of the Lahore Transport Company.

The notification stated that the two companies had been offering transport services "without registering the private cars with any regulatory body."

The notification also stated that the utilisation of private cars by Uber and Careem for commercial purposes is a violation of the city's local laws.

The provincial government also stated that the failure of Uber and Careem to obtain required fitness certificates and route permits for their fleets had resulted in "great loss to the government."

While Dubai-based Careem directly made inroads into markets in Karachi, Lahore and later Islamabad in October 2015, San Francisco-based rival Uber began operations in Lahore in 2016.

Sindh seeks curbs against Uber, Careem

Sindh Transport Secretary Taha Farooqi also said he had written to the Deputy Inspector General Traffic Asif Aijaz asking for a ban on Uber and Careem from operating in the province, Dawn learnt.

Speaking to Dawn, Farooqi said the provincial government had also asked the Pakistan Telecommunication Authority (PTA) to block both services' mobile apps as they had failed to obtain required no-objection certificates (NOC) and fitness certificates.

However, the PTA later told Dawn that while they had received a request from the Sindh government, it was not within the authority's purview to block these services.

Farooqi claimed that though negotiations were held with Uber over the last few months, only 8-10 cars had agreed to follow the authority's rules and obtain NOCs out of a total of 1,000-1,500 cars.

Talks were also held with Careem, but there was no willingness to comply with the rules, Farooqi added.

DIG Traffic Aijaz told DawnNews that police had impounded 3-4 Careem vehicles and taken drivers into custody. "We are just following orders," he said.

Sindh Transport Minister Nasir Shah later clarified that there was no crackdown against the two ride-hailing services while speaking in DawnNews show NewsWise.

"These companies follow regulations in all the countries they operate in, so why not in Pakistan?" Shah added.

"We are working on regulations, but we have taken no action against these services yet," Shah said.

Careem 'open to working with govt on regulation'

In a message broadcast live by Careem's Managing Director, Junaid Iqbal, after the ban was announced, the company said it is open to working with the authorities on laws and regulations to document what it says is a "new economy".

"We want to see what kind of laws we can help devise to regulate the sharing economy," Iqbal said. "We are ready to work with the government on all levels for this."

"We want to work with the Government of Pakistan and create 100,000 jobs by the end of 2018," Iqbal said. "For that you need private cars, taxis, rickshaws and motorcycles who can use our platform. [Together] we can create jobs and encourage entrepreneurship," he added.

Iqbal noted that countries around the world were devising new regulations to encourage the sharing economy, and that doing so had created jobs and encouraged entrepreneurship.

"The world over, economies are moving away from physical marketplaces to digital marketplaces," he said.

"Different countries are devising laws to accommodate these global changes, and we request Punjab's Chief Minister [CM] Shahbaz Sharif, Sindh CM Murad Ali Shah and Khyber-Pakhtunkhwa CM Pervaiz Khattak that this new technology, this new age, and this new economy should be embraced.

"It is in the interest of Pakistan to do so," he added.

Uber 'will continue to work with regulators'

In a statement emailed to Dawn.com, Uber said it would continue to work with regulators and policymakers "to help ensure that Pakistanis have access to safe, affordable and efficient transportation option."

"In the meantime, we will stand by our driver-partners," the organisation said, as "there are currently many drivers in Pakistan that are partnering with apps like Uber to help earn a sustainable income for themselves and their families."

"We look for more and better partnerships with all to enable Pakistanis to have access to our innovative services that has been meeting an overwhelming demand in Pakistan," it added.

Change of heart?

The move to ban the car-hailing services in Punjab came as a surprise.

Recent events hosted by Uber had been attended by prominent provincial officials, including Capital City Police Officer (CCPO) Lahore Captain Amin Wains, DIG Operations Haider Ashraf, Chief Traffic Officer Lahore Tayyab Cheema and Chairman Punjab Information Technology Board (PITB) Umar Saif.

Under Saif's leadership, the PITB had also inked a Memorandum of Understanding (MoU) with Uber last year "to promote effective use of technology across Lahore".

The agreement was meant to be "part of a long term collaboration for both organisations."

Uber in 2016 had also signed an agreement with the Bank of Punjab, a state-owned concern, to "work together for over 50,000 green cab and yellow cab customers, to bring them on to the Uber platform."

After the Punjab Govt declared the two ride-hailing services illegal, a tweet posted by Umar Saif indicated confusion regarding the move.

"Working on the Uber and Careem issue," he said. "Better sense will prevail."

Taxi companies or ride-hailing services?

Government bans on services such as Uber and Careem may prove to be counterproductive as the largely successful ride-hailing services filled a vacuum created by the government's negligence towards public transportation solutions.

With the launch of the ride-hailing services, commuters did not have to face long waits in queues for busses that were often unreliable in their operations, schedules and safety standards.

And while metro bus services have been operating in Lahore and Islamabad, the larger metropolis of Karachi still struggles to cope with a shortage of public transport.

According to a report published in 2015, of Karachi's 329 official bus routes, only 111 are being operated. The remaining routes were abandoned as “they are not considered lucrative by the transporters”.

The operating busses have also had to face the pressure of rising fuel prices, maintenance costs, and lack of protection from the government.

Uber and Careem had previously expressed their willingness to work with the authorities and comply with licenses.

However, the government has continued to view the services as 'taxi companies' even though the fleet of cars operating under Careem and Uber are not owned by the companies.