In a decisive regulatory move aimed at controlling the logistics sector and raising safety and quality standards, the Public Transport Authority in Saudi Arabia has issued a new executive regulation for the transport of goods using motorcycles. The regulation includes stricter penalties and escalating fines, in addition to stringent impoundment procedures, in an effort to end the chaos that has recently plagued this vital sector.
Background to the decision: Rapid growth and regulatory challenges
Over the past few years, and particularly with the accelerated digital transformation fueled by the COVID-19 pandemic, the Kingdom has witnessed a massive surge in delivery services via electronic applications. This rapid growth has led to the entry of a large number of unlicensed individuals and companies into the market, creating significant regulatory and security challenges. Unethical practices have become widespread, such as disregard for traffic safety regulations, improper storage of transported goods, and a lack of clear service quality standards. This has necessitated strong government intervention to regulate the sector in line with the objectives of the Kingdom's Vision 2030, which aims to improve quality of life and develop the investment environment.
Details of the new penalties: No leniency for violations
The authority has established a comprehensive schedule of violations and penalties, classifying them into two main categories: “serious” and “non-serious,” to ensure a graduated approach to punishment. It emphasized that serious violations, such as operating without a license, will be met with immediate penalties without prior warning.
The most prominent financial penalties include:
- Operating without a license: A fine of up to 28,800 riyals for large establishments with the bicycle being impounded for 40 days, while the fine for individuals is 16,800 riyals.
- Doubling fines: The authority has activated a strict mechanism to double the value of the fine in the event of the same violation being repeated within one year, where the value of the penalty can reach five times the basic fine when it is repeated for the fourth time.
- Customer data protection: The regulation considers any violation of customer data privacy or tampering with transported goods a serious offense that warrants deterrent penalties.
Broad powers for observers and strict administrative procedures
The new regulations grant broad powers to inspectors and the violations review committee to ensure strict enforcement of the rules. These powers include impounding motorcycles for up to 60 days in cases of repeated violations and suspending the licenses of non-compliant establishments for up to nine months. The regulations also include additional administrative penalties, such as closing offending businesses or blocking applications and websites, as a means of ensuring full compliance.
Deporting the violating expatriate and localizing supervision
The penalties were not limited to financial and administrative measures, but extended to include more deterrent actions. The regulations stipulated the deportation of any non-Saudi worker found to have violated specific provisions of the system after a final judgment. The regulations also included the penalty of publicizing the names of violators in local newspapers at their own expense. Furthermore, in support of Saudization efforts, the regulations mandated that establishments appoint a Saudi operational supervisor for every 50 motorcycles, imposing a fine of 12,800 riyals on establishments that fail to comply with this requirement. This aims to create quality job opportunities for Saudi citizens in this growing sector.
Expected impact: A safer and more professional market
These regulatory measures are expected to contribute to several strategic objectives. Domestically, they will enhance road safety, protect consumer rights, and regulate market competition to ensure high-quality services. They will also professionalize the sector and encourage organized investment. Regionally, this step positions the Kingdom among the leading countries in regulating the digital economy and logistics sectors, and could serve as a regulatory model for the region to address similar challenges.
