The Saudi Transport General Authority (TGA) has announced a temporary halt on issuing new licenses for motorcycle delivery services via mobile applications. This move comes as the authority finalizes new regulations for the sector. The decision marks the end of the experimental regulatory phase, during which companies were allowed to operate under provisional licenses. As the country adjusts to the rapid growth of delivery services, this step is set to reshape the industry.
Why Has Saudi Arabia Paused New Motorcycle Delivery Licenses?
The End of the Experimental Phase
According to TGA spokesman Saleh Al-Zuwayed, the experimental phase that allowed companies to deliver orders via motorcycles has now concluded. During this period, companies were granted licenses to test the regulatory framework, and adjustments are being made based on its outcomes. The halt on new licenses will remain in effect until the release of updated regulations that govern this fast-growing industry.
Safety and Legal Concerns
The security authorities have reported a number of incidents involving delivery motorcycle drivers who either lacked valid work permits or violated traffic regulations. These safety concerns have further accelerated the need for stricter control measures, ensuring that all drivers comply with legal and safety requirements.
The Growth of the Delivery Sector in Saudi Arabia
The Post-Pandemic Boom
Saudi Arabia’s delivery sector witnessed rapid growth following the outbreak of the coronavirus pandemic. The demand for home deliveries via electronic platforms surged, presenting lucrative opportunities for businesses and job creation. This sector, which relies heavily on motorcycle delivery services, has since become a crucial part of the country’s logistics landscape.
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Expansion of Light Freight Transport
The TGA has reported a 38% growth in light freight transport activity in the first quarter of 2024 compared to the same period in 2023. This growth reflects the booming demand for quick, convenient delivery services across the Kingdom.
There are currently around 300 official licenses for light freight transport in the country, with 80 companies actively engaged in motorcycle-based delivery services.
Commercial Registrations See Significant Growth
Rise in Business Registrations
Alongside the rise in delivery services, Saudi Arabia has also seen a marked increase in commercial registrations. By the end of Q1 2024, there was a 61% rise in commercial registrations related to the delivery sector, reaching 4,700 compared to 2,900 in Q1 2023. Furthermore, there has been a 45% growth in application development activities, with 11,423 commercial registrations for app development by the end of the same quarter.
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What’s Next for Saudi Arabia’s Delivery Services?
As the TGA works on finalizing the new regulations, companies and delivery drivers alike will need to adapt to the upcoming changes. The authority’s focus on traffic safety, work permits, and industry regulations is expected to create a more structured environment for the sector. The new regulatory framework is likely to improve the quality and safety of delivery services while providing clear guidelines for businesses operating within this space.
Conclusion
The temporary halt on new motorcycle delivery licenses marks a significant shift in Saudi Arabia’s delivery service landscape. With new regulations on the horizon, the sector is poised for continued growth but with a stronger emphasis on safety and compliance. The TGA’s proactive measures aim to enhance the industry’s long-term sustainability while addressing immediate concerns regarding traffic safety and legal adherence.
FAQs
Why has Saudi Arabia stopped issuing new motorcycle delivery licenses?
The Saudi Transport General Authority (TGA) has paused the issuance of new licenses for motorcycle deliveries via mobile apps while it finalizes new regulations for the sector.
What is the reason behind the halt in licenses?
The halt comes after the conclusion of an experimental regulatory phase, as well as concerns about safety violations and unlicensed drivers.
How has the delivery sector grown in Saudi Arabia?
Saudi Arabia’s delivery sector experienced massive growth during the pandemic and continues to expand, with light freight transport growing by 38% in Q1 2024 compared to Q1 2023.
When will new regulations be introduced?
While no exact date has been given, the TGA is expected to release updated regulations soon, which will impact how motorcycle-based delivery services operate in Saudi Arabia.
What should companies do during this period?
Companies should ensure compliance with existing regulations and prepare for new requirements by reviewing their operational standards, driver permits, and safety measures.