New transport regulations: fines up to 5 million riyals and vehicle impoundment

A new regulatory step for the transport sector in the Kingdom

In a significant regulatory step aimed at raising the level of quality and safety in the transportation sector, the Public Transport Authority in the Kingdom of Saudi Arabia has approved a new executive regulation that includes an updated schedule of violations and penalties related to mass passenger transportation activities via electronic applications. This regulation aims to regulate this vital sector and protect the rights of all parties, including passengers and service providers, in line with national strategic objectives.

General context and objectives of Vision 2030

The ride-sharing sector in Saudi Arabia has witnessed rapid growth in recent years, driven by digital transformation, a key pillar of the Kingdom's Vision 2030.With the increasing reliance on these services, the need has arisen for a robust legislative and regulatory framework to ensure sustainable growth and maintain safety and quality standards. The new regulations address this need by aiming to regulate the market, prevent unregulated practices, and enhance user confidence in the services provided, ultimately benefiting the national economy and improving the quality of life for citizens and residents.

Details of the strict penalties and fines

The new regulations establish a clear framework for penalties, based on a graduated system for repeat offenses within one year. Penalties include immediate fines and deterrent administrative sanctions to ensure full compliance with the regulations.

Escalating financial penalties

The regulations grant field inspectors the authority to impose immediate fines of up to 10,000 Saudi Riyals. In the event of a repeat offense, the fine is gradually increased up to five times its original value. For serious offenses committed for the sixth time, the relevant committee can impose the maximum fine stipulated by law, which may reach 5 million Riyals, in addition to the possibility of imposing a daily fine of up to 10% of the maximum fine if the violation continues.

Non-financial penalties and vehicle impoundment

The penalties were not limited to the financial aspect, but also included stricter measures to deter violators, most notably:

• Vehicle impoundment: The vehicle is impounded for up to 60 days when certain serious violations are repeated for the fourth time.
• Suspension of licenses: The facility's license or the suspension of drivers and vehicles from work may be suspended for up to one full year.
• Closing down applications: Blocking applications or websites belonging to violating establishments.
• Immediate deportation: Applying the penalty of immediate deportation to non-Saudis who practice the activity in violation of the law.

The importance of the regulations and their expected impact

This regulation is expected to have a multifaceted positive impact. Locally, it will improve the passenger experience by ensuring drivers adhere to safety and appearance standards and provide vehicles equipped with essential safety features. It will also enhance job security for law-abiding drivers by curbing unfair competition from unlicensed operators.

Regionally and internationally, this step reflects the Kingdom’s commitment to developing its regulatory environment to keep pace with global best practices, which increases the attractiveness of the Saudi market for foreign investments in the transport and logistics sector, and enhances the Kingdom’s position as a leading logistics hub in the region, which is one of the main objectives of the National Transport and Logistics Strategy.