Federal transport authorities are working on legislation that would force existing public transport associations to re-establish themselves as share companies.
The directive follows a similar scheme implemented by the Ministry of Transport and Logistics on associations engaged in the cross-border freight trucking industry. The associations have been re-registered as commercial entities over the last couple of months despite pushback from truck owners and operators.
The latest proposal for reform from the Ministry would see public transport providers operating routes in two or more of the country’s regions to register as share companies.
Earlier this month State Minister for Transport Bero Hassen elaborated on his office’s efforts to formalize the transport sector.
“Nearly all public transport providers are established under association,” he said. “It is an informal practice outside the jurisdiction of the law and the commercial code.”
The new rules would oblige transport operators to obtain a certificate of competency for the vehicles in their respective fleets, reliant on state inspections. Selam Bus, Abay Bus, Ethio Bus, Geda Bus, and others are among those who will be directly affected should the directive meet with approval.
The public transport directive has been tabled to the Justice Ministry for review.
Public transport operators are categorized into four classes, depending on the size of the fleet and the service life of their vehicles.
Share companies in the ‘Special Public Transport Operator’ category will be required to operate a fleet of no less than 10 vehicles, each having at least 45 passenger seats and an age of no more than seven years. Privately-owned firms in the same class must have at least five vehicles in their fleet.
The minimum fleet size for ‘Level One’ transporters is 30, with a 12-year limit on vehicle age. Private operators at the same level must have at least 10 vehicles in their fleet.
For ‘Level Two’, the fleet size requirements fall to 20 vehicles with 25 years of service for share companies, and five vehicles for private limited companies. Operators with 50 or more vehicles in their fleets that are 15 years old are categorized under the ‘Level Three’.
The directive allows commercial public transport entities to incorporate more vehicles into their fleets through lease.
Bero hopes to see the new rules incentivise transport operators in diversifying and improving their fleets.