Does Blocking ‘Bolt’ in Lebanon Serve the Interests of Drivers or Monopolists?

“My only option is to use Bolt’s motorbike service, both to avoid traffic and for the low ride fare,” Tima, a young Bolt rider, told SMEX, adding that the app is her preferred way to move around Beirut. However, she does warn riders “to be careful and take precautions, especially since the person that arrives for the pick-up might sometimes not be the same person shown on the app. There are also no guarantees in case the passenger is robbed or harassed, not to mention that there is no insurance in case of an accident.

Lebanon’s government is yet to adopt a clear strategy for public transport. The ministers entrusted with regulating the sector have not taken any steps to legalize the work of public transport drivers or private taxi agencies. Instead, Minister of Interior and Municipalities Bassam Mawlawi addressed a letter to the Ministry of Telecommunications on Monday, May 8, requesting shutting down the Bolt app “pending confirmation that the app is not in violation of the Traffic Law and other laws in force.”

In a TV interview on May 11, Mawlawi said he would “refer the case to the Public Prosecution to contact Google and have the app blocked.”

These developments took place after the Union of Public Transport Drivers staged sit-ins on Tuesday, May 2, in several regions across Lebanon, demanding that the government fulfill their requests, including banning private taxis, shutting down taxi and transport applications, and prohibiting the new modes of transport that emerged after the economic crisis in Lebanon, such as tuk-tuks.

Bolt became popular in 2020 for offering passengers discounts of up to 20% compared to other widely used apps at the time, such as Uber and Careem, as it did not charge drivers any fees.

However, Director-General of the Ministry of Economy Mohammad Abi Haidar said in a phone interview with SMEX that “Bolt has committed several legal violations, as the company is not listed on the Ministry’s commercial records.” 

Abi Haidar added, “Bolt does not have a representative office in Lebanon, does not pay any fees or taxes to the Lebanese government, and does not abide by Lebanon’s traffic laws. Rather, it has its own rules, which are inconsistent with the Lebanese legal framework. Applications such as Bolt should operate according to the directives of the Ministry of Telecommunications and the Ministry of Public Works and Transport.”

Restricting Passengers’ Rights and Limiting their Options
Public transport is almost non-existent in Lebanon, and many people rely on such applications for mobility, especially for commutes to work or school.

Chadi Faraj, the founding member of Riders’ Rights NGO, told SMEX that “shutting down Bolt puts users under the mercy of public transport operators and expensive private taxi agencies.”

Do officials intend to deprive people of their right to choose their preferred methods of travel that fit their needs and offer additional services, such as faster commutes and lower prices?

Faraj believes that “blocking Bolt or any other application undermines passengers’ rights by forcing them to use a single mode of transport that lacks transparent fares.”

Solutions exist, however, that can legalize the application’s work. For example, Egypt and Jordan issued special laws to regulate electronic transport apps. According to Faraj, Australia also did the same, requiring Uber to allocate part of its profits to public transport drivers who were negatively impacted by the spread of such applications. “Some municipalities in Lebanon, such as Byblos and Batroun, even managed to devise licenses for small tuk-tuk vehicles.”

What about Drivers?
The main problem drivers face is that ride-hailing apps, especially Bolt, “use vehicles that do not have public transport license plates. These vehicles are operated by non-Lebanese drivers who are unregistered and do not have public transport licenses, meaning that they do not have the right to transport passengers,” according to the Head of the Land Transport Unions Bassam Tlais. 

In an interview with SMEX, Tlais said that “the most serious violation lies in the fact that Bolt uses unregistered motorbikes with no insurance to protect passengers in case of an accident, in total violation of the Traffic Law.”

Nevertheless, some users believe that there is no alternative to motorbikes. Tima, a young woman who uses Bolt to hail motorbikes for all her trips, says that this mode of transport allows her to avoid Beirut’s excruciating traffic congestion. 

Tlais argues that Bolt can offer lower fares than other public transport methods because “the company does not bear the social security fees paid by public transport drivers, nor does it abide by the many other regulations imposed on the latter.”

One of Bolt’s drivers, who is also a member of the military, said that “the app has allowed me to make some extra income, especially with the devaluation of the Lebanese pound against the U.S. dollar and the deterioration of our wages.” 

The driver, who preferred to remain anonymous, assured SMEX that he had all the necessary legal paperwork. However, he acknowledges that many people use the app to rent out drivers’ accounts and work “illegally.”

Several solutions have been proposed. For example, Tlais mentioned that when Bolt was first launched, Lebanon’s Transport Union demanded that the company adopt an official fare according to the due legal procedures to end unfair competition, as all drivers and agencies would have to abide by the same fare.

Things didn’t go as planned. The authorities failed to take action, and Bolt, which is headquartered in Estonia, did not respond to inquiries from Lebanon. Tlais now demands that “law enforcement authorities punish violators using motorbikes and private license plates and only allow vehicles with public transport license plates to use Bolt.”

Suspending Bolt: Unclear Ministerial Powers and Confusion
There is a lack of clarity regarding Bolt’s activities and the official authority empowered to decide on the app’s legality.

Ali Hamieh, Minister of Public Works and Transport, told SMEX that he sent letters to the relevant ministries as early as May 2022 to look into the “legality of electronic applications offering passenger transport and delivery services illegally and the need to either suspend or legalize them.” There was no response.

As for the Minister of Telecommunications, Johnny Corm, he explained to SMEX that “the requests received by the Ministry of Telecommunications from the Ministry of Public Works to suspend the application do not have any legal basis,” adding that “the Ministry of Telecommunications was waiting for the judiciary to decide whether Bolt had violated the law or is operating legally, as it does not have the power to shut down the platform without a court order.” 

The Minister of Interior acknowledged this on May 1 when he announced that he would refer the case to the Public Prosecution.

Hamieh believes ride-hailing apps’ current mode of operation “creates unfair competition and causes severe harm to the drivers and owners of public transport vehicles, who have the exclusive right to work in the field of public transport for passengers according to the Traffic Law.”

The Minister of Public Works and Transport is not opposed to using such apps and platforms. He favors keeping pace with global developments, “provided that these apps commit to using public transport vehicles and drivers who hold licenses issued by the Ministry, which is why there is an urgent need to issue regulations in this regard.” 

Hamieh also demanded that the Ministry of Interior put an end to such violations and have the Cybercrime and Intellectual Property Bureau carry out the necessary investigations to identify the operators of electronic applications, detect any potential violations, and prevent them from conducting their business outside the framework of the law.

On Wednesday, May 10, Hamieh held a meeting at the Ministry of Interior to discuss Bolt’s activities and how to protect the public transport sector. Still, no decisions were made during the session.

Shortcomings in the Law Itself or its Implementation?
Bolt operates in Lebanon as an intermediary platform for public transport, as it connects users looking to hail a ride to car and motorbike drivers offering this service. However, the company is not registered in Lebanon and has no representative office in the country.

In a legal review by attorney Najah Itani, who is also a project manager at SMEX, she explains that Bolt operates as an offshore entity: “There are opposing legal views on whether the app is subject to the Traffic Law that regulates the profession of public transport for passengers, since the app itself does not provide the transport service, but rather offers a virtual platform to match supply and demand.”

As for the authority empowered to block the app, Itani argues that “the Law on Electronic Transactions and Personal Data grants this power exclusively to the court examining the case, to the investigative judge and the Public Prosecution.” 

The Minister of Interior may use his administrative oversight prerogatives through the Traffic Authority to request that the Cybercrime Bureau investigate the platform. Still, he does not have the power to block the application himself.

The Bolt case also stirred a debate around whether the app should be subject to financial laws, especially corporate tax law.

In this context, Itani explains that “Bolt is subject to taxation if it makes profits in Lebanon.” Bolt’s business model is based on it being a platform that only connects drivers to passengers. Currently, it does not charge drivers or passengers any commission, as the customer pays the service charge to the driver directly.

Who Protects Data?
Bolt’s business model in Lebanon raises a more serious question: If the app is not making profits through its operations in Lebanon, is it using the personal data it collects to bring in revenue?

Itani believes that the government has started to look into the app’s legality without paying any attention to the personal data collected by Bolt, stressing that “data security is the responsibility of the party collecting and processing such data, which, in this case, is Bolt.”

In the same context, digital transformation expert Ramez Al Kara told SMEX that Bolt collects sensitive data, particularly about circulation patterns, so there is a need to verify the confidentiality of this data and check whether the company complies with international standards. 

Al Kara stated that the Ministry of Telecommunications could do that by submitting a request to the company. “Bolt was allowed to operate in Lebanon three years ago without verifying its digital activities. The discussion about legalization only began when other problems arose,” he added.

Despite this, Minister of Telecommunications Johnny Corm told SMEX that he had not received any technical or legal brief about the operator of the app, about the user data it collects, or whether it poses a threat to public safety.

Given that the app collects the personal data of Lebanese citizens, “it is subject to the Lebanese laws on data collection,” according to Itani, who pointed out that Lebanon is not listed on Bolt’s legal compliance list, which makes it difficult to obtain accurate information on the policies adopted by the company in Lebanon. 

The same issue came to light in Tunisia: When Bolt’s collection of Tunisians’ data was raised, the company responded to the Business and Human Rights Center through a statement (August 2022) in which it claimed that “We only collect the kind of data […] that are inevitably needed for using the platform. […] We are committed to complying with the rule of law and will continue to work closely in consultation and engagement with local authorities.”

The conflicting information and prerogatives between the ministries concerned with the issue of Bolt in Lebanon should not lead to the app’s suspension, as some ministers have suggested. This is especially true since “there are doubts that the decision to block the app was taken not to meet the demands of drivers, who have been requesting for years that the work of such applications be regulated, before and after the launch of Bolt, but rather to curry favor with monopolist taxi agencies,” according to what a journalistic source told SMEX.

Until a binding law is issued to protect privacy in Lebanon, SMEX demands that all ministers take the necessary actions to regulate the work of such applications instead of blocking them. Rather than adopt the policy of blocking and shifting the burden to the weakest link in the chain – i.e., drivers and passengers in this case – the government should live up to its responsibilities by protecting users’ data in Lebanon and legalizing the work of apps that make profits and collect data.

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Safaa Ayyad

Safaa Ayyad is a media graduate of Beirut Arab University. She works with several media outlets.