August 13, 2009 / Abu Dhabi /  A rental car from One Car Dirham a Day drives around Abu Dhabi August 13, 2009. Customers can rent cars for a dirham a day if they don't mind a car filled with advertisements. ( Sammy Dallal / The National) *** Local Caption ***  sd-081309-rentcar-06.jpg
A car from One Rent Car carrying an advertisement seeking more clients to add to its stable of 92 branded cars.

Adverts on wheels make for a cheap drive



If you don't mind driving an advertisement on wheels, you can rent a car in the UAE for just Dh1 a day. "Clients didn't believe it at first," said Hakim Gouasmia, the chief executive of One Rent Car. "Not until they got into the car, drove off and waved back at us."

Never mind the customers - other car rental companies couldn't believe it either. "You must be kidding. How is it even possible?" was the reaction at one well-known firm. There is, of course, a catch: customers must agree to drive an average of at least 70km a day or pay Dh5 for every kilometre they fall short of that. Drivers also have to pay a Dh60 annual membership fee to be able to rent the cars and leave a Dh2,500 deposit, from which salik and other expenses will be deducted when the car is returned.

Luella Kay, the general manager at One Rent Car, said the service was "something that works for everyone ... It is almost community service-oriented - fun and enjoyable for the community." One Rent Car charges the advertisers an average of Dh3,000 per "branded" car per month. The company designs the eye-catching advertisements that cover the entire car except for the windscreen and front side windows and applies them to its vehicles in-house.

Customers can pick up a branded car from the company's office in Sharjah or have it delivered to them for a fee of Dh100 in Ajman or Umm al Qaiwain, Dh150 in Dubai, Ras al Khaimah, Fujairah and Al Ain and Dh250 in Abu Dhabi. After launching the scheme in January, One Rent Car now has 92 branded cars for rent. Ms Kay said this form of advertising reflected modern life. "It is like telling people you are new, modern and forward-thinking, without actually telling them because it instantly portrays that image."

The ads are effective too, she said. "Each car gets an average of 50,000 contacts per day. So at the end of the month there are about 1.5 million people who have seen the advert and have interacted with the company that is advertising." Meanwhile, the dirham-a-day rental is particularly attractive because of the tough economic times. Some customers for the branded cars have been laid off or are unable to get financing to buy a car. "When things like this [the economic slowdown] happen, it really inspires innovation," Ms Kay said.

Some, however, rent the branded cars solely for the fun of it. Ali Hamze, 26, of Lebanon, has been renting one for two months now. He owns a car but prefers to drive the colourful rental because he enjoys the attention it gets. "People keep looking at you and some want to talk to you," he said. "You feel like a famous actor." Hamda al Abbar from Dubai said she thought it would be amusing to drive one of the distinctive cars.

"I would do it for the fun of it, even if I had my own car," she said. The National took a branded car out on the streets of the capital for a day and it got a lot of attention. Not everyone likes the idea. "Why would I advertise for somebody else?" said Siham al Safyani from Morocco. "They should pay us to advertise for them instead." Others said they would only rent a branded car if their own vehicle was being repaired, while a few, like Mohamed Shawar from Egypt, said it would depend on where they were driving it.

"I would rent it with my friends, but I wouldn't drive it to work, that's for sure," he said. Ms Kay said most customers for the branded cars were between the ages of 25 and 35 and earned between Dh9,000 and Dh12,000 a month. She said there was also a high interest in renting the cars among Emiratis, which was initially unexpected. "We are now widely supported by the local market," she said. The company also customises cars with personal messages, including birthday wishes or even marriage proposals. This service costs between Dh1,500 and Dh5,000, depending on the work involved and the duration of the rental.

Ms Kay said she enjoyed seeing people's reactions when they came in for a branded car. "To children, it is like being able to sit in a big toy. It's fantastic."

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

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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