By Andrew Raven News Focus Freeing Taxpayers The ruling NDP cut personal income and corporate taxes in half, but the emergency law is here to stay High Times Bankers expect higher interest rates to heat up the investment climate and cool inflation Mastering Law A new law program at the American University in Cairo seeks to get students serious about law Until the Cows Come Home Consumers are still waiting for Sudanese beef to hit the market AloAchoo! The next generation of viruses has hit mobile phones Star Power The 2004 Olympics created some unlikely national icons and a powerful lineup of marketing potential Below Par The World Bank says Egypt is handicapped by the high costs to start a business and the difficulty of firing people, to name a few Corporate Bonding Orascom Telecom and Telecom Egypt have made a splash in the bond market, but rising interest rates may damper enthusiasm Unmaking Monopolies Opposition MPs say changes to a proposed anti-trust law defy the purpose of the law by protecting monopolies On Topic The Euromoney conference put an exclamation point on the liberalization efforts of the government Investment Matchmakers Egypt Invest 2004 seeks to convince foreign investors that the country has finally turned a corner ’Dish’ing it Out Satellite TV stations are set to give the state-run channels a run for their advertising revenues during Ramadan Cargo Crunch As exporters complain about skyrocketing airfreight prices, the government seems to be turning an unsympathetic ear Star Power The 2004 Olympics created some unlikely national icons and a powerful lineup of marketing potential By IBA Archives

By Jessica Gray and Passant Rabie

Two and a half years of living in Cairo have taught Matthew Kuehl how much taxi fares should be. So when a quick trip from Dokki to Zamalek in a metered white cab came to LE 17 instead of LE 7, Kuehl didn’t hesitate to mention it to the driver.

“I said, ‘Your meter is broken. It’s going too fast’.”

The cabbie, though, laughed it off. He told Kuehl the digitized horse that graces most meters “just likes to run fast.”

Kuehl figured the meter had been tampered with. But he didn’t press the issue and forked over the LE 17, an experience that left a sour taste in his mouth.

“The reason I use white taxis is simply not to have to deal with the hassle of bartering. At least in an old black cab, you can argue the price. In a white cab, [drivers] point to the price on the meter and what do you do?” he asks.

He’s not the only one who’s disenchanted with the new taxis, introduced last year as part of an ambitious government plan to phase out Cairo’s rundown black and white cabs.

While the program was wildly successful in its opening months, a growing number of drivers are tampering with their meters, sometimes charging up to four times the legal rate, according to government officials, passengers and taxi drivers themselves.

Many worry the problem will only get worse as white cabs become ubiquitous: By 2011, they will make up roughly 35% of taxis in greater Cairo.

“There are some drivers who play around with the meter,” says Mohamed Abd Allah, a white taxi driver who told bt he knows several colleagues who cheat passengers.

“They just want to make more money and take advantage of the customer.”

While there are no concrete figures showing how many cabbies are driving around with fixed meters, the Ministry of Finance, which helped launch the white taxi program, says it is looking into the problem.

The government first became aware of the scam a few months ago when dealerships, during routine maintenance, reported discrepancies between cab meters and odometers, says Assistant Deputy Finance Minister Mohamed Abdel Aziz.

Guilty drivers lost their five-year warranties, though Abdel Aziz cannot say how many cabbies were sanctioned.

“I wouldn’t say that it’s a widespread problem. Most of the people know that they will be kicked off the warranty if they do so,” says Abdel Aziz, adding the government is looking at other ways to short-circuit the scam.

“I would suspect that there will be fewer people doing it in the future.”

White cabs burst onto to the scene in May 2009 after the government passed a law that will force all taxis over 20 years old off the streets by 2011.

To smooth the transition, officials unveiled a program that pays drivers LE 5,000 for their clunkers, and makes them eligible for preferential loans on new Speranzas, Peugeots, Hyundais, Chevrolets and Ladas.

So far, 17,000 drivers have made the switch, and 18,000 more are expected to join them this year, says Abdel Aziz. (There are about 100,000 taxis in greater Cairo.)

Taxi drivers, initially hesitant, embraced the changeover as their customer base grew, especially among the millions of tourists who visit Cairo annually.

Passengers, who found themselves sitting on plush seats and basking in air-conditioning, were also happy. And officials welcomed the decommissioning of thousands of old taxis prone to break downs, a key cause of congestion on Cairo’s creaking road network.

However, a few months ago, passengers and taxi drivers say they started noticing meters had been tampered with. Cab driver Allah, who traded in his old black and white taxi last year in favor of a new Lanos, isn’t sure how drivers speed up their meter. But he says it will continue to happen if the government doesn’t implement harsh penalties, such as revoking licenses.

In the end, the scams will only make life harder for the legions of honest drivers, he says.

“There are some people who prefer the black and white taxis because someone in a white taxi who took advantage of them.”

Omar Hamwi, a researcher, is among them.

He started avoiding white taxis after being overcharged several times. The most memorable was a trip from downtown to City Stars Mall in Nasr City that cost LE 60. Government-mandated fares start at LE 2.50 and go up LE 1.25 per kilometer; Hamwi was charged LE 6 per kilometer.

“It happened just as I was beginning to trust white taxis with meters, but I should have known.”

Still angry, he’s sworn off white cabs, despite the good experiences he had when the program got underway.

“There’s a significant amount of cabs running around with ridiculously high meters,” he says. “They don’t understand the concept that the more they do it, the fewer people will use white cabs. It’s about immediate gratification. LE 40 now is better than LE 100 next week.”

Part of the problem is the lack of a hotline or dedicated service customers can call to report cabbies bent on swindling their customers.

A media spokeswoman at the state-run Consumer Protection Agency, Khalifa Adham, says riders don’t have much recourse when it comes to being cheated unless they write down the license plate and call the police themselves.

“Any [other] complaint we get, we contact the specialized authority to deal with it. But it’s hard with the white taxis because there is no specialized authority that can deal with the complaints,” she says.

The 15 or so consumer protection groups listed on the agency’s website deal with products, instead of services, and are therefore no help either.

Abdel Aziz admits that the government hasn’t tackled this issue adequately, partly because it is not within the finance ministry’s jurisdiction to impose fines or penalties. However, this could change; officials are in talks with the Ministry of Interior to set up an oversight body.

The ministries are eager to find out exactly how the meters are being reprogrammed.

Many of the new breed are manufactured and programmed by Active Trade Co., based in Cairo. Rami Adel, a manager at the company, was angry when bt suggested cab drivers were rigging their meters.

“I haven’t heard of anyone saying that white taxis rig their meters. The software is designed so that the driver doesn’t know how to fiddle with it, there’s no way he can rig it,” says Adel.

Only qualified technicians at Active Trade Co. are able to adjust the meters, he says.

Cabbie Ahmed Hassan doesn’t care about the ins and outs of tinkering with the meters. All he knows is that it’s happening, which means better business for black and white taxis like the one he drives.

His car isn’t much to look at. A 1979 Fiat, it’s seen better days, but the fact remains that Cairenes who’ve been scammed appreciate going back to haggling rather than face the prospect of being cheated again.

His real concern is that he’s being forced to get a new car under the law, making it even harder to earn a living.

“Soon enough, all the taxis will be white taxis, one system. I wish they would keep the old black and white cars [in service]. It’s unfair that I’ll have to sell this car, take only LE 5,000 and then live the rest of my life with loans.” bt