Careem leaves fare cuts to Uber

Customers of online taxi service Careem have been told not to expect a drop in fares despite a recent price cut in Abu Dhabi by rival Uber.

DUBAI // Customers of online taxi service Careem have been told not to expect a drop in fares despite a recent price cut in Abu Dhabi by rival Uber.

Last month Uber announced it was cutting fares in Abu Dhabi by 17 per cent, raising the prospect of a price war between the two cab hire firms.

But Mudassir Sheikha, chief executive of Careem, said he had no room to reduce prices further if he was to stay within regulations set by the government.

“We consider ourselves a responsible local company that needs to abide by laws that the different emirates have for a service like ours,” Mr Sheikha said.

“In Abu Dhabi, Dubai and the others there is some regulatory guidance on pricing and we are committed to meeting and remaining within those.”

Last December, Dubai’s Roads and Transport Authority said it would remind the two firms of rules that require them to keep rates at least 30 per cent above those of traditional taxis.

The RTA has reportedly fined Careem and Uber drivers in the past for breaking the rules.

Uber said its fare from Reem Island to Abu Dhabi International Airport had gone from Dh70 to Dh60. Careem offers an estimated fare of Dh84 between Reem and the airport.

Fares charged by Abu Dhabi government taxis for the trip range between Dh60 and Dh70.

In Dubai, Uber charges between Dh80 and Dh103 for a trip from Dubai International Airport to Mall of the Emirates, while Careem estimates the fare to cost Dh123. Dubai taxis charge about Dh85 for the same route.

Chris Free, Uber’s general manager in the UAE, acknowledged the price rules set by the RTA in Dubai, but he said pricing was complex because competing companies calculated fares differently, relying on factors such as distance, time and speed.

“There is sometimes difficulty in understanding how the pricing system works because we price differently to Careem, and price differently to Dubai taxis.”

“We’ve actually worked very hard with the Government to ensure that the prices we’ve put forward are correct. It’s consistent dialogue we are having but as far as we are aware, we’re priced within regulations.”

Regulatory challenges have followed Uber as it has expanded its service across the globe.

In addition to the UAE, local, online-based competition has sprouted up to challenge the firm.

Dubai-based Careem, launched in 2012 and based in Dubai, was the focus of a recent Vanity Fair article entitled "The Global Alliance to Take Down Uber is Growing".

The article said Dubai was one of the markets where Uber, one of the world’s most valuable technology firms, was running into direct competition.