Uber Technologies is ramping up its investment and growth plans in the UAE by accelerating its strategy of electrifying its fleet in line with sustainability goals, a senior global executive has said.
The ride-sharing pioneer plans to double the rides taken on its electric vehicle or hybrid fleet in the Emirates to make up 20 per cent of all trips by the end of 2023, Andrew Macdonald, senior vice president for mobility at Uber, told The National.
The UAE and Middle East are regions that are "leading on a number of the key priorities for the business, including our efforts on sustainability, which includes electrifying our platform. They are places where we're investing in expanding our product portfolio," Mr Macdonald said.
"Putting money behind driving consumer adoption [for EVs] ... and that investment pool flow and Uber Green in the UAE is a big priority for us."
The UAE is also a key part of San Francisco-based Uber's global $800 million Green Future programme to help subsidise the consumer switch to EVs, he said.
"We haven't split that amount by region or by country, but it's safe to say that the Middle East and the UAE will benefit from that level of support," Mr Macdonald said.
At the time of the investment's announcement in 2020, Uber said it would operate as a zero-emission mobility platform in the US, Canada and European cities by 2030. By 2040, Uber's services – which include its delivery arm – will run on zero-emission vehicles.
"The types of uses for those dollars are helping subsidise the upfront cost of electric vehicles, which today, for the most part, are still more expensive than ICE [Internal Combustion Engine] vehicles," he said, referring to internal combustion vehicles, or those that are powered by petrol.
The EV market continues to grow amid a global shift towards energy conservation and adherence to sustainability and climate change goals.
Manufacturers of EVs are expected to deliver about 15 million units globally in 2023, a year-on-year surge of nearly 35 per cent, as regulations meant to curb emissions further tighten, a September study from Gartner had shown.
Smart mobility has been a key theme in the UAE, with the government rolling out initiatives promoting its use and adoption. Dubai had put a heavy emphasis on this during the six-month-long Expo 2020.
Abu Dhabi, on the other hand, earlier this month launched the new Smart and Autonomous Vehicles Industry cluster at Masdar City, aimed at establishing the emirate as a major centre for the development of high-tech and next-generation vehicles.
Uber has been active in the UAE, both through its own platform and Careem, the Dubai-based start-up it acquired for $3.1 billion in 2020 whose services span ride-hailing, food and grocery deliveries, and other essential services.
The company has also struck partnerships to expand its footprint. In May, Uber signed an initial agreement with Etihad Rail, the developer and operator of the UAE National Rail Network, to collaborate on expanding passenger transport options in the country and share mobility data to better serve the market.
"We have a tonne of confidence in our ability to electrify our platform in this region, and in the UAE specifically because of that energy and that speed around solving this problem," Mr Macdonald said.
Uber is also encouraging governments to incentivise the purchase of EVs among consumers, similar to those being implemented in the US and Europe, in order for a more seamless transition to a carbon-free future, he said.
"The upfront cost of electric vehicles is too expensive; there's still a significant premium on average versus ICE vehicles," Mr Macdonald said.
The other challenges, he said, is that a "meaningful" second-hand market for EVs has yet to be developed, which would help bring more consumers into the sector without compelling them to spend too much, and the availability of more charging stations.
"Governments have a significant role to play in deferring some of those [EV] costs. They can design a variety of incentive programmes to do so," he said.
In August, Uber reported its first-ever operating profit in the second quarter, underpinned by a growth in deliveries and bookings. The company is scheduled to report third-quarter earnings on November 7.
