The Public Transport Authority in the Kingdom of Saudi Arabia announced the approval of fundamental and decisive amendments to the regulations governing car rental activity, in a step aimed at readjusting the sector and eliminating arbitrary practices that negatively affect the quality of services provided and safety levels.
Details of the decision to ban renting
Under the new amendments, specifically the fourth paragraph added to Article 39, anyone found to be engaged in unlicensed land transport activities (passenger or freight transport) using rental vehicles will be prohibited from using car rental services for a full year. This ban will take effect immediately from the date the violation is established, and will include renters and their agents who use vehicles for purposes other than those for which they are intended, or who enable others to use the vehicle for unauthorized activities.
Context of regulating the transport sector and combating "street vendors"
This decision comes as part of the Authority's ongoing efforts to combat the phenomenon of unlicensed transportation, known locally as "Kaddada," where some individuals rent private vehicles and use them as unlicensed taxis. These practices not only harm fair competition with licensed taxis and approved ride-sharing applications, but also pose a security and social risk due to the lack of oversight of drivers and vehicles during these unlicensed trips. The Authority is working within the framework of the Kingdom's Vision 2030 to automate the sector and electronically link violations to ensure a sophisticated logistics environment.
Strict requirements to enhance compliance
In addition to the penalty of prohibition, the executive regulations emphasized the basic requirements for the rental process, stressing the necessity for the renter to possess valid identification and a valid driver's license for the entire duration of the contract. The amendments also focused on insurance, obligating rental offices and beneficiaries to ensure that all authorized drivers meet the insurance coverage conditions stipulated in the vehicle insurance policy, thus guaranteeing the financial and legal rights of all parties in the event of an accident.
Expected impact of the decision
This deterrent measure is expected to significantly reduce traffic and regulatory violations related to the transportation sector. It will also enhance consumer confidence in regulated transportation services and protect the investments of licensed companies in the taxi and ride-hailing sector, creating an attractive, safe, transparent, and highly professional investment environment.
