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UPDATE 2-Egypt court suspends Uber, Careem licenses - judicial sources

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CAIRO, March 20 (Reuters) - An Egyptian court ordered the suspension of licenses for ride-hailing companies Uber and Careem on Tuesday, ruling on a lawsuit filed by taxi drivers seeking to shut down the two firms' operations in the country, judicial sources said.

Forty-two Egyptian taxi drivers filed suit a year ago against the two companies, arguing that they were illegally using private cars as taxis and that they were registered as a call center and an internet company, respectively.

Khaled al-Gammal, a lawyer acting for the taxi drivers, said the court suspended the two companies' licenses, banned their apps and suspended the use of private cars by the two ride-hailing services.

Tuesday's decision was effective immediately, meaning the companies must suspend services pending a final ruling, but the companies have 60 days to appeal, the judicial sources said. It was not immediately clear when a final ruling would be issued.

Careem, a Dubai-based competitor to Uber, said it had not yet received any official request to stop operations in Egypt, and continued to operate as normal.

Uber intends to appeal any court decision to suspend ride sharing licenses in Egypt, a source familiar with the matter said. Uber had not been officially informed of the ruling, the source said.

Uber said last year it was committed to Egypt despite challenges presented by sweeping economic reforms and record inflation. Uber in October announced $20 million of investment in its new support center in Cairo.

The San Francisco-based company has had to make deals with local car dealerships to provide its drivers with affordable vehicles and adjust its ride prices to ensure its workers were not hit too hard by inflation.

Uber had two million users in Egypt in 2016, giving jobs to 60,000 drivers, it said.

Egypt is one of Uber's fastest-growing markets, its general manager in the country, Abdellatif Waked, has said, according to state news agency MENA.

Egypt's investment ministry said last year a draft law regulating web-based transport services would provide a legal framework for companies like Uber, but did not say when that bill was likely to be passed.

Uber has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services. It has been forced to quit several countries, such as Denmark and Hungary.

Last year, London deemed Uber unfit to run a taxi service and stripped it of its license to operate. Uber is appealing against the decision. (Reporting by Omar Fahmy, Haitham Ahmed and Arwa Gaballa Editing by Edmund Blair and Adrian Croft)