Uber’s rise in the UAE ‘We are good. But we could be great’
For Uber – the US$60 billion (Dh220bn) company at the centre of a ride-hailing revolution and recent controversy in the capital – the takeover of the UAE started small.
In its quest to deliver services that have proved so popular elsewhere, the technology firm flew in a team of three people to prepare the ground for its launch in August 2013. From these streamlined beginnings, and the launch of a service with just 50 cars, Uber has 3,000 drivers across the UAE, and receives tens of thousands of requests every week.
But this week, Uber and its rival Careem temporarily suspended operations in Abu Dhabi after drivers were detained by police over pricing regulations. In a statement, Uber said that “no driver partners using the Uber platform were stopped” and that the company would not resume services until it had “clarity on the matter and reassurances that partners will not be at risk”. Uber’s Dubai service was not affected. When I spoke to Christopher Free, general manager of Uber UAE, before its troubles, what concerned him most was the limits on its service in Dubai.
“We are good,” he said. “But we could be great.”
Free says usage of the platform in Dubai has “exploded” over the past year.
But for all its expansion so far, local pricing rules means it cannot expand like it has done elsewhere in the region. Under rules set by Dubai’s Roads and Transport Authority, Uber must keep its UAE rates at least 30 per cent above those of traditional taxis. “It means we can’t offer what we offer in 99 per cent of our markets – a product cheaper than a taxi,” explains Free.
“It has definitely inhibited our ability to grow faster. In fact, I would say that over the last six months, it has led to other cities in the region outpacing Dubai.”
Uber has also been tagged locally as a “premium product”, meaning it cannot make products such as the car-sharing option UberPool – hugely popular elsewhere – available here.
Here unlike elsewhere, Uber also has to function in partnership with licensed limousine operators. And anyone looking to set up a limousine company in the UAE must have at least 20 cars, with 18 being classed as luxury vehicles and costing at least Dh175,000, and put down a Dh5 million deposit. Here Uber drivers normally work at places such as hotels, or are drivers contracted to businesses. During slow periods when they are not needed by their primary service user, they switch to Uber. Uber, the limo company and the driver then get a cut of each fare.
“It isn’t cheap,” Free admits. Financial hurdles like this, he says, prevent entrepreneurs from entering the market, and, in turn, restrict the number of cars Uber can access.
The company has proved itself elsewhere: in 2015, Uber drivers covered 58 million miles in the Middle East and North Africa region. Rider growth rose 500 per cent between the first quarters of 2015 and 2016, driver growth leapt 400 per cent in the same period.
Saudi Arabia has about 177,000 active riders (80 per cent of users are women) and Uber says this is because the kingdom’s rulers and officials have embraced its service. “It’s tough to see how we can grow here to the level of the likes of Saudi Arabia and Egypt,” says Free.
Separate to the issues that have over taken the service in Abu Dhabi, Uber is in talks with a view to freeing up its potential. The company points to a survey by rival Careem, which shows that seven out of 10 of its passengers had never taken a taxi, as evidence that dispels the notion of Uber drawing business away from Dubai’s existing taxi network.
Until this week, the team was still confident of conquering the UAE because of its “massive market”, the ease of access it offers and the Emirates’ love of technology – and it has several plans in store.
UberEats – an on-demand meal-delivery service powered by the Uber app – will launch soon, and a company that has demonstrated its ability to innovate through the likes of UberYacht and UberChopper is working on other enhancements.
“Uber has changed my life,” says Waleed Chattha, from Pakistan, who has been a Dubai-based Uber driver since shortly after its launch in the city.
“I don’t have a boss, I’m independent and I’m very, very lucky because it’s my choice whether to be online or offline.”
Read more: Uber in the UAE: how it works
He also highlights Uber’s scoring system – which allows passengers to rate drivers, but also enables drivers to give their customers a score – as a tool for enhancing equality. “The same platform exists for both driver and customer,” he says. “It makes you more than just a taxi driver, especially when the customers praise you.”
Pulling up on a side street near Dubai Internet City, Uber driver Zaheer Ahmed, who has been with the company for a little more than six months, lovingly takes a cloth to polish the exterior of the car – a Lexus ES 350 saloon, which is the most common Uber car.
He takes pride in keeping his vehicle spick-and-span for his customers, which he describes as the best part of his job.
The Pakistani refers to his customers as “guests” in his car and say they bring a lot of diversity and enjoyment to his day. Fellow Pakistani Ayaz Mehboob, who joined Uber a year ago, says the company’s drivers pride themselves on raising standards. “We give a really good service, and in return, the customers are so nice,” he says. “They often comment on the attitude of the drivers, the cleanliness of the car and our awareness of the rules.”
Uber has clearly made an impression here as elsewhere. It just wants to make more of a mark. And that depends on whether a company that has made ease-of-access its selling point can itself access what it needs to make this country the Uber-land it hoped it would be.
Jennifer Bell is a freelance reporter based in the UAE.
Published: August 30, 2016 04:00 AM