Transportation Ministry to Pay NIS 1.6 Million to Taxi Operator

Israel's Transportation Ministry has been ordered to compensate Yahalom Transport, a "sherut" (shared taxi) operator in the Netanya region, NIS 1.6 million for a significant flaw in a 2019 tender. The ruling was made by Jerusalem District Court Judge Anat Singer, who largely rejected Yahalom's original NIS 5.6 million claim.

Yahalom, managed by Muhammad Sa'asani, began operating the service in July 2020 and was contracted for 4.5 years. However, the company terminated the agreement after only one year, citing damages of millions of shekels due to the ministry's negligence in drafting and implementing the tender. The ministry acknowledged Yahalom's losses amounted to NIS 4 million but disputed responsibility.

Yahalom's lawsuit focused on three main issues: the ministry's failure to secure stop locations in Tayibe and Herzliya, not disclosing the operation of a competing bus line with lower fares after Yahalom was mandated a 6.1% discount, and requiring the installation of Rav-Kav (public transport smart card) devices incompatible with the previous operator's system, leading to passenger loss.

Judge Singer accepted the claim only regarding the Rav-Kav devices. She dismissed claims about the bus stops, stating the tender clearly placed responsibility for securing them on the winning bidder. Regarding fares, she ruled that a reasonable bidder should have investigated competing prices and noted Yahalom had previously withdrawn this argument.

However, Singer found the ministry negligent concerning the Rav-Kav devices. She noted that while central to the "sherut" taxi reform, the tender lacked specific instructions. The ministry, as the tender's drafter and regulator, was expected to provide clear information. While not intentionally hiding information, the ministry's oversight created a negligent misrepresentation by omission. The ministry was also ordered to pay NIS 320,000 in legal costs.