Vehicles with a commercial license plate can no longer engage with ride-hailing services, according to a new directive issued by the City Administration.

The Addis Abeba City Administration Transport Bureau issued a directive, dubbed the ''Electronic Taxi Dispatch Service Control Directive,'' two weeks ago that reserved taxi-hailing services for only code-01 vehicles.

The directive, which has been in the making for the past year, focuses on administering taxi services that use information systems to connect customers with drivers.

The new directive also requires taxi service providers to obtain an exclusive license from the Transport Bureau before operating taxi-hailing services.

Modernisation of the taxi system and technological advancements in taxi-hailing services has triggered the drafting of the directive.

"Thus, there is a need to establish a legal and formal framework that will oversee the service," reads the directive.

Taxi-hailing services were introduced in 2017 with only a few companies in operation. Now the number has grown to 10 companies, which use both internet and phone-based platforms to link drivers with passengers.

While the use of the technology was good, the service remained unregulated, according to Solomon Kidane (PhD), economic cluster coordinator of the city with the rank of deputy mayor.

The taxi-hailing companies used to work with the yellow taxis that were imported with duty-free privileges. Later, private and commercial automobiles joined these service providers. Though the city’s transport law prohibited the use of Code-03 plates for taxi service, the automobile owners continued working with these companies.

Last year Hybrid Designs, developer of the Ride taxi-hailing platform, entered a rental agreement with commercial vehicles owners and integrated them into its system. The owners of commercial vehicles obtained a car rental business license before entering an agreement with the company.

However, the company’s move was deemed illegal by the City Administration, who argued that the vehicles violated the commercial law by using code-03 cars as public transport vehicles without the proper licenses from the City Transport Authority.

Then the City Administration banned the issuing of Code-03 plates temporarily until it came up with a law to regulate the sector.