New private car rental regulations: Individuals are now permitted to rent via apps

In a regulatory move aimed at transforming the land transport sector, the Public Transport Authority in Saudi Arabia has issued the executive regulations governing private car rental and brokerage activities via electronic applications. This step aims to enhance sector governance, improve operational efficiency, and ensure the rights of all parties involved in the contractual relationship, including lessors, lessees, and brokers.

A regulatory framework that aligns with Vision 2030

This new regulation is part of the Kingdom's ongoing efforts to develop the legislative framework for the transport and logistics sector, in line with the objectives of Saudi Vision 2030, which focuses on digital transformation and promoting the concept of the "sharing economy." This regulation aims to eliminate unregulated practices in the car rental market, provide an attractive and secure investment environment, and enable the use of technology in all transactions to ensure transparency and reliability.

Investment opportunities for individuals through apps

Perhaps the most significant aspect of the new regulations is opening the door for Saudi individuals to invest in their personal assets. The regulations allow licensed establishments to engage in "brokerage" activities, enabling them to arrange privately owned car rental services exclusively through approved electronic applications. The Authority has established specific controls for this activity, the most prominent of which are:

• Allowing an individual to register only one car for rental purposes.
• The car must be owned by the individual directly or through a financial leasing system.
• The commitment is to deal only through licensed electronic channels, and to prohibit dealing through traditional offices or providing a driver rental service.

Strict standards to ensure quality and safety

To ensure the quality of service provided to beneficiaries, the regulations require establishments wishing to operate in this sector to maintain a minimum fleet of 100 vehicles, whether owned or leased, to guarantee operational solvency. Regarding the operational lifespan of the vehicles, the regulations stipulate a maximum limit of five years from the year of manufacture.

As part of supporting clean energy initiatives, the Authority granted a special exception for electric and clean energy vehicles, as well as luxury cars, where their operational life may be extended to 10 years by a decision of the Authority’s Chairman, reflecting the sector’s commitment to supporting environmental sustainability.

Electronic contracts and consumer rights protection

The authority emphasized the necessity of fully automating operations, prohibiting any activity without linking to the "Wasl" electronic platform. It also mandated that all service providers issue standardized contracts that include:

• Clarify the type of insurance coverage and the deductible.
• Fuel policy, distance traveled, and delay cost.
• Ensuring the beneficiary's right to a replacement vehicle (of the same category or higher) in the event of a technical defect not caused by his negligence.

The regulations also stipulate that the contract automatically terminates upon official reporting of an accident or theft, protecting the renter from incurring costs during the period of forced vehicle downtime. This comprehensive regulation aims to bolster confidence in the Kingdom's car rental market and opens new avenues for citizens to increase their income through legitimate and reliable means.