The Addis Abeba Transport Bureau steps up its exertions to bring the capital's ride-hailing fleets under oversight three years after a failed attempt by municipal authorities.

Dawit Yeshitla, head of the Bureau, disclosed vehicles with commercial license plates would not be excluded from providing ride-hailing services.

“But their operations will be monitored," he told Fortune.

The City Administration issued an ordinance in 2019, banning vehicles with commercial license plates (Code-3) from providing ride-hailing services, limiting it to transport cars with Code-1 plates. It imposed on ride-hailing companies to obtain licenses from the Transport Bureau before starting operations. However, it was suspended a month after the announcement, relenting to push back from ride-hailing companies and their users.

Thus far, no entity has been mandated to regulate the application-based taxi-hailing industry due to the lack of a legal framework. This began to change this year after the City Council legislated a proclamation granting the Transport Bureau the mandate. The Council passed the law during a rapid expansion in the ride-hailing business. The number of platforms has doubled to nearly 40 over the past two years. The Bureau has begun registering the companies.

“The intention is to identify those operating illegally,” Dawit told Fortune. “After gathering information, we'll formalise the industry."

The Transport Bureau thus far registered 17 ride-hailing companies, and officials say the Bureau does not recognise most companies in the business.

The former Addis Abeba Driver Vehicle Permit & Control Authority has been put under the Bureau following the restructuring of public offices under the administration of Mayor Adanech Abiebie. The reshuffling shrank the number of bureaus and offices down to 45 from 71. The city's Transport Bureau employs over 1,000 people.

Industry insiders agree that there is a need to establish a legal framework to supervise and regulate taxi-hailing services. There is cut-throat competition in the industry, according to Habtamu Tadesse, chief executive officer of ZayTech IT Solutions Plc, which operates ZayRide.

The industry pioneer, launched in 2016, emulating the global ride-hailing giant Uber, works with 7,000 drivers. Samrawit Fikru, who co-founded Ride as a subsidiary of Hybrid Designs Plc, followed suit. Ride began services in March 2017 with a capital of 40,000 Br. Samrawit inaugurated last week Ride's overseas operation in Djibouti.

“Most companies don't have standards when registering drivers and their vehicles,” said Habtamu. “Those who charge low commission fees are disrupting the industry."

Offering gifts, raffles, awarding miles to users, and cutting commission rates drivers pay are some marketing strategies deployed to win over users.