New car rental regulations: Violators will be barred from renting for a year
The Public Transport Authority in Saudi Arabia announced significant and decisive amendments to the regulations governing car rental . These amendments aim to regulate the sector and curb irregular practices that negatively impact service quality and safety standards. This decision is part of the Authority's ongoing efforts to develop the land transport system and ensure compliance with applicable regulations by all parties.
Context of new regulations and development of the transport sector
This step is part of a series of structural reforms underway in the Kingdom's transportation sector, aligned with the objectives of the National Transport and Logistics Strategy and the Kingdom's Vision 2030. Over the past few years, the Authority has worked to automate car rental through the "Tajeer" electronic portal and mandate standardized contracts for all parties involved to guarantee their rights. These cumulative efforts aim to eliminate commercial concealment in the sector and curb the phenomenon of unlicensed transportation, known locally as "Kaddada," where rental cars are used to transport passengers without the necessary permits, a clear violation of regulations.
Details of the decision to prevent violators from renting
Under the new amendment, added as paragraph four to Article 39 of the regulations, anyone found to be engaged in the unauthorized use of a rental car for land transport will be prohibited from renting cars for a full year. This prohibition takes effect from the date the violation is established and applies to both the renter and the authorized driver under the contract. The decision also extends to individuals who enable others to use the rental car for these illegal activities, thus preventing any circumvention of the regulations.
Expected impact: Enhanced security and fair competition
This decision is expected to bring about a significant improvement in safety and order on Saudi roads. From a security standpoint, the decision ensures that passenger transport is conducted only through licensed and technologically monitored vehicles, thus safeguarding passengers and property. Economically, the decision will foster fair competition among licensed transportation providers, such as ride-hailing apps and taxis, who bear the costs of operation and licensing, while unlicensed operators competed illegally using rental cars. This regulation will inevitably lead to an improvement in the quality of service provided to the end user.
Basic requirements for contract validity
In addition to the new penalties, the executive regulations emphasized the continued application of essential contract requirements, including the requirement for the renter to possess valid identification and a valid driver's license for the duration of the contract. The authority also stressed the necessity for all authorized drivers to be covered by the insurance policy, ensuring their financial and legal rights in the event of accidents, thus fostering a safe and reliable transportation environment.
