As taxi drivers in several European cities strike and protest over Uber, the US-based company has enjoyed a seamless introduction in the Middle East and is eyeing expansion across the region.
“We have grown more than ten-fold since we launched last year,” said Jean-Pierre Mondalek, the general manager for the UAE at Uber. “The reason we have been able to expand so fast is because we are a tech company. We’re growing faster now than we were last year.”
Uber is a smartphone application that connects commuters with private drivers. It is celebrating its first year in the Middle East this week by launching its low-cost option, UberX, and its corporate account service Uber for Business.
Dubai became the 44th city to join the network a year ago. It has since expanded to Abu Dhabi, Beirut, Jeddah, Riyadh and Doha. There are more than 215 cities on Uber’s network globally and the company is hiring staff in the region with plans to launch in Cairo next.
“We were a team of three and now we are 20 serving the Middle East region,” said Mr Mondalek.
While cabbies in European cities from Madrid to Berlin have clogged traffic to protest against the effect that Uber has had on their income, and a court in Germany banned the service entirely (the injunction has since been overturned), regulators here have welcomed the app and have even launched their own version for Dubai.
In Dubai, the Roads and Transport Authority’s (RTA) regulations prevent Uber from undercutting local taxi companies by enforcing a 30 per cent surcharge on the minimum fare. That means the UberX low-cost service has a minimum fare of Dh13.
The cost of an UberX ride from Dubai Marina to the airport’s Terminal 1 is in the range of Dh70 to Dh89. UberBlack, its higher-end service in Audis and BMWs, would charge Dh87 to Dh110 for the same trip.
“It is a utopian market for Uber – that’s the reason we have grown so fast in the UAE. The smart city government initiative encourages innovative technology like ours,” Mr Mondalek said. “The RTA’s reaction to us was to launch their own smart app and that’s awesome. I applaud them for thinking ahead.”
The service has also proven popular with the Uber driver partners, who traditionally would wait at hotels and pick up holidaymakers.
“Now we get more jobs. It is easy and quick for us,” said Shafqat Hussain, a driver at Askari Limousine. “The price is less, but there are more jobs.”
Mr Mondalek declined to specify the number of Uber users or trips made daily in the region, but did say that it was in the thousands.
He said Uber was beginning to change the way residents commute, and its effects have trickled down to the Dubai taxi companies, which are using the RTA smart app.
“It is good for us because it is quicker. We reach the customer and pick them up quickly,” said Waqas Ahmad, a driver with National Taxi. “Before customers had to call the RTA, wait for the order and then go.”
Uber is looking to expand the use of its software outside of transportation and further into lifestyle sectors.
“Today we’re an on-demand transportation service, tomorrow logistics, and in the future on-demand lifestyle,” Mr Mondalek said.
thamid@thenational.ae
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German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
