Licensing and Regulation of special public service transport networks using online digital applications
The Traffic and Road Safety (Amendment) Act, 2020 (“the amendment) was passed by the Parliament of Uganda on the 29th of January, 2020 and assented to on 22nd May, 2020.
The amendment is intended, among many other reasons; to strengthen road transport regulation, to abolish the Transport Licensing Board, to require drivers to be in possession of a copy of a valid driving licence and a copy of the registration book while driving, to provide for licensing of driving schools and instructors and to empower the Minister of Works and Transport to organize public transport.
The amendment therefore repeals a number provisions of the Traffic and Road Safety Act, 1998 (“principal Act”) and it introduces new regulatory frameworks that are designed to encompass certain contemporary issues within the transport sector. One of such issues is the special category of transport network companies offering transport services online.
Online Digital Platforms
Technological innovations are continuously causing improvements and for the most part, disruptions in many sectors worldwide forcing countries, Uganda inclusive, to make policy changes that recognize and in effect regulate such improvements. In the transport industry, mobile applications such as Bolt, SafeBoda, Uber and Jumia Food have caused a fundamental disruption to the public transportation systems. From reducing the cost for transactions to circumventing the existing regulatory requirements, mobile applications have continued to both impress and cause problems for the users, incumbent operators and the Governments alike. While it is hard to argue against the enormous benefits across the spectrum ushered in by the mobile/ digital platforms, there are some legal issues which might warrant the imposition of restrictions on how these platforms are allowed to operate, such as consumer protection and asymmetric regulatory burden on other transportation incumbents.
The Traffic and Road Safety (Amendment) Act, 2020, therefore introduces Section 70A which provides for licensing and regulation of special networks using online digital applications. Anyone who wishes to provide an online digital platform for the provision of public service transport to passengers or goods has to apply to the Department of Transport Regulation and Safety in the Ministry of Works and Transport (“the competent authority”) for authorization to operate the online digital network. It also requires persons who intend to carry passengers or goods for reward through an online digital network to also apply for an operator’s licence.
In order to ensure that such platforms are safe and secure, before a license is granted, the competent authority may perform the following actions;
- Carry out background checks on the applicant;
- Require that the drivers to be hosted on the digital platform are accredited and issued with badges;
- Require the applicant to submit a tax clearance from the Uganda Revenue Authority;
- Require the applicant to obtain the relevant insurance; and
- Require the applicant to submit periodic reports and information to the competent authority.
What does this mean?
Section 70A of the Traffic and Road Safety (as amended), places online transport service platforms such as Uber, bolt and SafeBoda within the regulatory ambit of the Ministry of Works and Transport. Like traditional transport service providers, these online platforms will have to equally abide by the traffic and road safety requirements in Uganda.
- The most immediate and noticeable change is that, businesses that use mobile apps or any other digital platform for the purpose of offering public transport services in Uganda, such as Uber, SafeBoda and Jumia Food, have to formally apply and obtain operating licenses from the competent authority in order to comply with these regulatory amendments. This will definitely affect both the existing operators and potential entrants to the market.
- The amendment also indirectly creates a legal requirement for the operators of online platforms to have local presence in Uganda through incorporation. This is on account of the Licensing requirement that authorizes the competent authority to require an applicant to present a tax clearance certificate prior to the grant of a license. The tax clearance certificates will not be granted to an entity that is not registered in Uganda for tax purposes.
- The Regulatory changes also create an opportunity for consumer protection through the Competent Authority in relation to the conduct of both the Operators and also potentially the drivers.
Authors
Augustine is an advocate and a partner at Kampala Associated Advocates (KAA) with expertise in Technology, Media and Telecommunications law. He has acted for many of the leading companies within the Technology and Telecommunications space, particularly in Uganda, including the industry regulator and Authority.
David is a Legal Assistant in the Litigation Department. However, his experience extends to the Corporate Advisory Department, Intellectual Property, Mining Law and Employment. David is very passionate about Intellectual Property law as well as Technology, Media and Telecommunications law.
