A transportation reform that many believed would transform the livelihoods of thousands of chareidi drivers across Israel appears headed for the scrap heap, as Finance Minister Betzalel Smotrich and senior Treasury officials are reportedly blocking the legislation over a dispute involving compensation for taxi owners.

The proposal, commonly known as the “Uber Law,” would have legalized and regulated paid ride-sharing services operated through private vehicles and smartphone applications. For thousands of chareidim who currently earn income through informal “driver” networks, the legislation was viewed as a long-awaited opportunity to operate openly and legally.

Despite passing its first reading in the Knesset, the bill has stalled completely, and its supporters now fear it may never become law.

The legislation was advanced by MKs Moshe Passal, Dan Illouz, and Eitan Ginzburg and sought to bring Israel’s growing ride-sharing market under formal regulation. It would have established safety standards, insurance requirements, government oversight, and licensing rules for drivers and companies operating in the sector.

For many in the chareidi community, however, the significance of the bill extended far beyond transportation policy.

In recent years, thousands of chareidi men have turned to private driving as a source of supplemental income. Many operate through community-based networks and messaging groups, providing transportation services with flexible schedules that allow them to combine earning a living with learning or other responsibilities. Legalization of ride-sharing services was expected to significantly expand those opportunities.

Under the proposed law, drivers would have been required to meet strict standards, including maintaining a clean criminal record, holding a driver’s license for at least four years, completing periodic training courses, and providing proof of medical fitness.

The bill’s current troubles stem from fierce opposition by the taxi industry, which argues that legalization of ride-sharing services would significantly reduce the value of taxi licenses.

The original legislation included a compensation mechanism under which taxi license holders who surrendered their licenses would receive reimbursement through a dedicated fund financed by a percentage of future ride-sharing revenues. Taxi owners rejected that arrangement, insisting on immediate compensation rather than future payments.

According to sources familiar with the discussions, former Finance Ministry Director-General Ilan Rom supported the legislation and viewed it as an important step toward increasing competition in the transportation sector. His successor, Israel Malachi, is said to oppose the measure in its current form, reflecting the position of Finance Minister Smotrich.

Transportation Minister Miri Regev and her ministry have reportedly continued to support the legislation and even expressed willingness to provide immediate compensation to taxi owners in order to break the deadlock.

In an effort to save the proposal, Regev reportedly suggested temporarily funding the compensation package from other Transportation Ministry budgets, provided the Finance Ministry later reimbursed those funds. Treasury officials reportedly rejected the idea outright.

The impasse has left supporters increasingly pessimistic.

MK Moshe Passal, who led much of the bill’s advancement through the Knesset Economic Affairs Committee, has reportedly expressed deep frustration over the situation and believes the chances of passing the legislation during the current Knesset term are rapidly diminishing.

Supporters say the collapse of the bill would represent a significant missed opportunity for thousands of Israelis who rely on ride-sharing income, particularly within the chareidi community, where flexible driving arrangements have become an important source of supplemental earnings for many families.

Even beyond the budget dispute, the proposal faces an uncertain future. While the legislation could theoretically continue in the next Knesset under Israel’s continuity provisions, doing so would require the support of a future government.

Given the Finance Ministry’s current opposition and the political hurdles facing the measure, many observers believe the next coalition may have little incentive to revive it.

If the bill ultimately dies, lawmakers would either need to restart the entire legislative process from scratch or persuade the Transportation Ministry to reintroduce the proposal as government-sponsored legislation.

For now, what many chareidi drivers viewed as a pathway to legal, regulated, and expanded ride-sharing opportunities appears increasingly unlikely to become reality.

Responding to the report, the Finance Ministry stated: “If such proposals are submitted to the Finance Ministry, they will be examined both from a professional standpoint and from a budgetary standpoint.”

{Matzav.com}