UK ruling unlikely to impact Uber Mideast drivers

Uber driver and president of the (ADCU), App Drivers & Couriers Union, Yaseen Islam poses with a poster outside the Supreme Court in London on Feb. 19, 2021. (AP Photo/Frank Augstein)
Short Url
Updated 22 February 2021

UK ruling unlikely to impact Uber Mideast drivers

  • Ride-hailing service in KSA already heavily regulated, with only Saudis allowed to drive

DUBAI: A high-profile court ruling in the UK that Uber drivers are entitled to employment benefits such as paid holidays and sick pay is unlikely to have any significant impact in Gulf Cooperation Council (GCC) member states as the ride-hailing sector in the region is already highly regulated.

The Supreme Court decision declared that British drivers for Uber should be classed as workers, not self-employed.

The ruling rejected Uber’s appeal on an employment tribunal ruling brought by two of its drivers in 2016.

Joe Aiston, a London-based senior associate at law firm Taylor Wessing, told Reuters that the ruling could act as a reference for courts and regulators outside the UK.

But this is unlikely to have a major impact on Uber drivers in the Middle East as the sector is already heavily regulated, and in Saudi Arabia it was recently declared that only its citizens could work for services such as Uber.

“Within the context of the UAE and the KSA, the Supreme Court UK decision has no impact on the status of Uber and Careem drivers in the Middle East. The UK is a separate common law system with its own regulations entirely separate and distinct from the systems in the Middle East,” Sara Khoja, UAE-based partner and co-head of employment for the Middle East and Africa at law firm Clyde & Co, told Arab News.

“In the UAE, the key status for an individual is sponsorship to work and reside. It is however, interesting that in the Middle East, the governments in the UAE and KSA have moved in the direction of providing more flexible work models for individuals such as freelancing. With the strive to create a technology hub and an SME culture, we anticipate that there may be more models for flexible working in the coming years in this region. From a legal perspective, it is a balance between individuals having flexibility and freedom to contract and strict employment frameworks.”

The company’s Middle East spokespeople did not respond to an Arab News request for comment on its operations in the region.

Instead, they referred to the global statement issued by Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe.

“We respect the court’s decision which focused on a small number of drivers who used the Uber app in 2016,” he said.

“Since then, we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury,” he added.

“We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

FASTFACTS

• 16 companies are licensed to operate ride-hailing services in the Kingdom.

• Around 800,000 drivers are registered, 250,000 are said to be actively driving in Saudi Arabia.

• Over the past three years, 300 million trips were carried out using ride-hailing services in the Kingdom, earning drivers around SR6 billion ($1.6 billion).

• Saudi Uber drivers generally own their own cars, with the company taking 20-30 percent commission for each ride.

The crux of the legal debate in the UK came down to whether Uber drivers should be classed as self-employed, workers or employees.

In the UK, a worker is classed as an intermediate status between self-employed and employee, with certain benefits and entitlements such as a contract, minimum wage and paid holidays.

At present, no Uber driver in the Middle East is considered an employee of the company, and is paid on a commission basis.

“You’re the boss. You can drive with the Uber app day or night. Fit driving around your life, not the other way around. Make money on your terms,” Uber says on the UAE and Saudi driver homepage of its website.

“The more you drive, the more money you can make. When demand is higher than normal, you can make even more.”

A recent survey commissioned by Uber in the UK found that 89 percent of drivers said flexibility was the most important reason they chose to drive using the app.

A majority of drivers surveyed would rather retain the right to set their own hours, even if the alternative was 20 percent higher pay.

In Saudi Arabia, the ride-hailing industry is already highly regulated. Last month, the Ministry of Transport and the Public Transport Authority (PTA) announced that only Saudi nationals are allowed to drive for services such as Uber and its main rival Careem, which was itself bought by Uber in a $3 billion deal last year.

The PTA said 16 companies are licensed to operate ride-hailing services in the Kingdom, and do so in 60 cities nationwide. While around 800,000 drivers are registered, 250,000 are said to be actively driving.

Mueed Al-Saeed, an assistant vice president at the PTA, told Al-Ekhbariya TV that over the past three years, 300 million trips were carried out using ride-hailing services in the Kingdom, earning drivers around SR6 billion ($1.6 billion).

Transport Minister Saleh Al-Jasser announced in January a series of initiatives to encourage more Saudis to become drivers, including an agreement with the Social Development Bank to provide drivers with funding to purchase their own private vehicles.

Saudi Uber drivers generally own their own cars, with the company taking 20-30 percent commission for each ride, a former driver told Arab News.

But occasionally Uber offered incentives for drivers to work more and reduced the commission to 10 percent, he added.

In the UAE, the situation is a bit different as only Emirati drivers are allowed to drive their own private vehicles, and expat drivers are generally direct employees of fleet or taxi companies.

But it is unclear if the fleet drivers work for a flat salary for the company that provides their employment visa, or whether commission on the Uber rides goes to the driver or the company.

Uber has direct links to Saudi Arabia through its sovereign wealth fund, the Public Investment Fund (PIF), which first invested $3.5 billion in the company in 2016.

Earlier this month, as part of its Q4 2020 regulatory filing in the US, the PIF’s stake in Uber was valued at $3.71 billion, representing 29 percent of its total portfolio of investments in the country.


Saudi group wins Subway master franchise deal in UAE

Updated 21 September 2021

Saudi group wins Subway master franchise deal in UAE

  • In Europe, Middle East, and Africa, Subway plans to double its number of restaurants across the region in the coming years

DUBAI: Saudi Arabia’s Kamal Osman Jamjoom Group on Tuesday signed a master franchise agreement with Subway in the UAE as the restaurant brand seeks to expand its footprint in the region.

The deal marked the start of a new chapter for Subway in the UAE as it seeks to expand its footprint and remain competitive in the market.

“Subway is making bold and impressive changes to continue to grow its presence in markets around the world,” said Hisham Al-Amoudi, Group CEO of Kamal Osman Jamjoom Group.

“As Subway continues to expand internationally, we are focused on attracting well-established, large-scale operators in regions where they can leverage market expertise to help our brand thrive,” said CEO John Chidsey.

Established in 1987, Kamal Osman Jamjoom Group is a major franchise industry player in the Middle East with 675 stores across seven countries, making it one of the largest franchise networks in the region. They are a valued partner to some of the world’s most iconic brands, such as The Body Shop, LEGO, and Early Learning Center.

The group’s “deep knowledge of the Middle East and experience strengthening and expanding other global franchisee brands makes them the ideal partner in the UAE,” Mike Kehoe, EMEA president at Subway.

In Europe, Middle East, and Africa, Subway plans to double its number of restaurants across the region in the coming years and will continue to seek strong partners to support the brand on its journey.

The agreement will enable significant growth in the UAE in the coming years  including accelerated deployment of restaurant remodels — featuring a new, modern “Fresh Forward” design — as well as improved, consistent guest experiences, both on- and off-premise.


France’s OVHCloud takes first step toward IPO and hopes to raise around $470m

Updated 20 September 2021

France’s OVHCloud takes first step toward IPO and hopes to raise around $470m

  • OVHCloud hopes the IPO will “accelerate its growth trajectory and consolidate its European leadership position while continuing to expand in North America and Asia”

PARIS: French cloud computing services provider OVHcloud said it was hoping to raise 400 million euros ($468.64 million) via the issuance of new shares as part of a planned initial public offering (IPO) on the Paris stock market.
OVHCloud hopes the IPO will “accelerate its growth trajectory and consolidate its European leadership position while continuing to expand in North America and Asia,” the company said, as it released its IPO registration document.
The family-owned company added on Monday that it was targeting a revenue growth of 10-15 percent for 2022 and an organic revenue growth rate in the mid-twenties by 2025.
These growth targets would be achieved while maintaining an adjusted EBITDA (earnings before interest, tax, depreciation and amortization) margin in line with the fiscal 2020 level.
No dividend payments were anticipated in the mid-term with cash-flows expected to be re-invested in line with the company’s accelerating growth trajectory, it added.
Following the IPO, the Klaba family will retain a substantial majority stake in OVHcloud.
The company had initially announced its IPO plans in March, two days before a major blaze destroyed one of its data centers in eastern France — a disaster that had raised concerns about its capacity to go public.
In June, OVHCloud re-committed to an IPO but provided no timetable.


ACWA Power bets big on Uzbekistan growth

Updated 19 September 2021

ACWA Power bets big on Uzbekistan growth

  • ACWA has invested about $1.2 billion in Uzbekistan thus far
  • ACWA plans to contribute to $100 million Uzbekistan fund

MOSCOW/RIYADH: In the crowded corridors of the Hilton Tashkent City, ACWA Power Chairman Mohammad Abunayyan talks quietly with key delegates of the Islamic Development Bank’s annual meeting in Uzbekistan, who approach him one after another.

Abunayyan, a lean, middle-aged, intelligent-looking man is celebrating with the bank's officials the launch of the $100 million Economic Empowerment Fund for Uzbekistan earlier this month. 

ACWA Power is planning on becoming one of the Saudi investors that will make up 45 percent of the fund, which is also being financed with money from the Islamic Development Bank and the Uzbek government.

ACWA’s contribution would be the latest in a long line of investments in the Central Asian nation, where the utility now has assets worth $4.6 billion having invested about $1.2 billion, according to the prospectus for its initial public offering that was launched earlier this month.

Although that is less than one tenth of the SR248 billion ($66 billion) of assets ACWA has accumulated globally since it was established in 2004 with what Abunayaan describes as a small equity investment. Abunayaan joined the board in 2008.



Beyond its home market in Saudi Arabia, ACWA also owns assets in Oman, UAE, Bahrain and Jordan.

Still, Uzbekistan is an important market for ACWA Power.

In 2020, the company was awarded three projects: Sirdarya Combined-Cycle Gas Turbine (CCGT) independent power producer (IPP) with 1,500 MW of gross contracted power capacity; the 500 MW Bash Wind IPP; and the 500 MW Dzhankeldy Wind IPP.

The company’s fourth and largest Uzbek asset in Uzbekistan is the Karakalpakstan 1,500 MW Wind IPP project, valued at $2 billion. The Karakalpakstan, Bash and Dzhankeldy projects are at advanced stages of development and Sirdarya IPP is under construction.



ACWA Power’s investments in Uzbekistan represent a sizeable chunk of total foreign direct investment (FDI) that the country has received in recent years.

“Uzbekistan attracted $2 billion in FDI in 2020 and targets another $5 billion this year,” Atabek Nazirov, director general of the Direct Investment Fund of Uzbekistan, told Arab News on the sidelines of the IDB’s two-day conference on Sept. 3.

Such investments mean a long-term relationship between ACWA Power and Uzbekistan.

“[In our projects] we need to lay the foundation for a long-term partnership, this is a relationship that lasts for 20, 25, 30 years,” Tom Teerlynck, executive vice president of ACWA Power, said during a panel discussion organized by the Islamic Corporation for Insurance of Investments and Export Credits.

“The early years go very smoothly because everybody is happy — agreements signed, infrastructure is being built, the services being provided,” he said. “But problems come in later when people in ministries or private companies change. So, it’s very important to lay very robust foundations.”

Uzbekistan officials are confident that ongoing reforms will propel economic growth, despite the global shock caused by COVID-19.

“In 2020, Uzbekistan was the only economy in the Central Asia region that did not have a negative gross domestic product [GDP],” said Direct Investment Fund of Uzbekistan’s Nazirov. “We were able to achieve just above 1 percent growth.”

The government is forecasting economic growth of 6.5 percent this year although that is a conservative scenario and it is hoping for closer to 7 percent, Ilhom Norkulov, Uzbekistan’s deputy minister of economic development and poverty reduction, told Arab News at the IDB meeting.

“For the next five years our target is to increase GDP to $100 billion so we are working to create conditions for the economy to grow 6-7 percent a year,” he said.

However, Uzbekistan’s economy is facing tailwinds in the form of a high inflation rate – expected at 10-11 percent this year – unemployment of 10.5 percent in 2020 (up from 5.8 percent in 2017) and a decline in average monthly wages to a low of $226 in the fourth quarter of 2018 from a peak of $415 in 2016, but back to $280 in the second quarter 2021, according to official data.

Government officials say they are fully aware of the issues, and maintaining economic reforms and income growth should ease the employment and wage conditions over the long run.


Lebanon’s soaring inflation led by 250 percent jump in fuel costs amid currency slump

Updated 18 September 2021

Lebanon’s soaring inflation led by 250 percent jump in fuel costs amid currency slump

  • Lebanese CPI jumped 123 percent in the year to July 2021
  • Food and non-alcoholic beverages prices rose 248 percent

DUBAI: Lebanese residents were forced to pay more than double for consumer goods in July compared with a year earlier as prices soared amid a partial lifting of fuel subsidies and a record plunge in the local currency.

The latest data from Lebanon’s Central Administration of Statistics shows the consumer price index leaped 123 percent year-on-year last month as officials struggled to contain an economic meltdown the likes of which have not been seen since the end of the country’s 1975-1990 civil war.

The biggest contributor to surging prices has been the cost of transportation, which soared by 253 percent from July 2020, reflecting the rise in fuel costs after the previous government priced gasoline at the exchange rate of 3,900 pounds to the dollar in June. Two months later, the central bank began providing fuel importers with dollars at an exchange rate of 8,000 pounds to the dollar.

The Lebanese pound has been officially pegged at 1,507.5 pounds to the dollar since 1997, but is worth a lot less on the black market. Following the resignation of former Prime Minister-Designate Saad Hariri in July, it plummeted to a record 24,000 per dollar.

This pushed prices of food and non-alcoholic beverages up by 248 percent in the year to July 2021, while health care services rose by 178 percent. Prices at restaurants and hotels grew 246 percent and clothing and footwear prices almost doubled.

The formation of Najib Mikati’s government last week, following a 13-month political vacuum, provided Lebanese with slight reprieve.

The pound stabilized at around 14,000 to the dollar on Thursday amid the new government’s pledges for reforms and a resumption of talks with the International Monetary Fund (IMF) which had hit a dead-end following bickering over the size of the banking sector’s losses.

Reforms demanded by the international community include a forensic audit of the central bank’s accounts and a restructuring of the banking sector.

On Thursday, a meeting took place at the Economy Ministry with the president of the syndicate of supermarket owners and the president of the syndicate of food importers to discuss lowering the prices of goods.

The meeting touched on a new pricing mechanism for goods in the wake of the Lebanese pound’s surge, with new economy minister Amine Salam saying that ” both unions have committed to start reducing the prices of commodities.”

“The ministry will not tolerate this issue and will be strict in monitoring price,” he said.


Saudi mining law will attract ‘incredible’ private investment to $1.3 trillion sector: Golden Compass CEO

Updated 19 September 2021

Saudi mining law will attract ‘incredible’ private investment to $1.3 trillion sector: Golden Compass CEO

  • The Saudi Industrial Development Fund is also offering 60 percent loans to investors in a bid to attract global players into the Kingdom
  • Alcoa Group, The Mosaic Co. and Barrick Gold have invested in the Kingdom's mining sector

RIYADH: Saudi Arabia’s new mining law will attract private investment from home and abroad as the Kingdom looks to exploit an estimated $1.3 trillion of potential value in the sector, according to Meshary Al-Ali, founder and CEO of mining consultancy Golden Compass.

In January, the Kingdom moved to capitalize on the vast wealth hidden below ground in Saudi Arabia with the establishment of a mining fund and support for geological surveys and exploration program activities.

The Saudi Industrial Development Fund is also offering 60 percent loans to investors in a bid to attract global players into the Kingdom, while the Ministry of Industry and Mineral Resources is investing $3.7 billion in the sector.

The deputy minister of Industry and Mineral Resources Khaled Al-Mudaifer talked up the potential riches beneath the Kingdom’s soil last month, telling CNBC that studies have estimated $1.3 trillion in reserves of phosphates, gold, copper, zinc, nickel, rare earth metals and other minerals.

Speaking to Arab News, Al-Ali was confident the Kingdom’s enthusiasm for the sector would attract worldwide attention.

FASTFACTS

Studies have estimated $1.3 trillion in reserves of phosphates, gold, copper, zinc, nickel, rare earth metals and other minerals in Saudi Arabia.

The Saudi Geological Survey has announced 54 locations for exploration, with more to be revealed soon.

The Kingdom has already attracted major international investors.

“It’s a very flexible and very transparent system, and it’s one of the most powerful in mining around the world,” Al-Ali said. “The system is new and it can encourage investors to come to Saudi Arabia.”

Under Vision 2030, mining is the third pillar of Saudi Arabia’s economic development, after energy and petrochemicals, as it aims to diversify the country’s economy away from dependency on oil.

The Saudi Geological Survey has announced 54 locations for exploration, with more to be revealed in the coming months that will be auctioned to investors.

The National Geological Database is being created to allow investors to find the locations of mineral deposits in a bid to increase the transparency and competitiveness of the sector in Saudi Arabia.

The Kingdom has already attracted major international investors, including US firm Alcoa Corp., which has a 25.1 percent stake in Ma’aden Bauxite and Alumina Co., and Ma’aden Aluminium Co., as part of $10.8 billion joint venture with Saudi miner Ma’aden, located in Ras Al-Khair Industrial City in the eastern province.

Fertilizer producer The Mosaic Co., another US company, has a 25 percent stake in the $8 billion Ma’aden Wa’ad Al-Shamal Fertilizer Production Complex located in Wa’ad Al-Shamal Minerals Industrial City in the northern province of Saud Arabia.

Canada’s Barrick Gold Corp. has a 50 percent stake with Ma’aden in the Jabal Sayid underground copper mine and plant.

“The private sector contribution will be incredible within the next couple of years,” said Al-Ali.

The mining sector is expected to create thousands of jobs in the Kingdom in the coming years with the goal of 256,000 geologists, engineers and others by 2030, he said.

“The ambitions will be reflected in a doubling of the sector’s contribution to GDP,” said Al-Ali.

“The income for the mining sector was above SR96 billion ($26 billion) in 2020 and we are targeting SR176 billion by 2030.”