Local ride-hailing app Careem is to match the basic price of Dubai's government-run taxis in price when it rolls out a new service next year.
Starting at Dh6 and with a minimum charge of Dh12, the new service Go will be 30 per cent cheaper than a standard Careem ride, which starts at Dh16.
It will also take on UberX, which has been trialled in recent months.
Bassel Al Nahlaoui, managing director of the Gulf at Careem , said: “We captured our first results and the RTA was very happy with them – the appetite was definitely there. We saw a lot of customers using it even though it launched with a limited supply of 300 cars.”
Go has been operating as a pilot scheme since April.
Although the service’s minimum fare will be Dh12, prices will raise by 10 to 50 per cent automatically during peak times when demand increases.
“This dynamic pricing works in the favour of everyone because instead of the service being unreliable, you let the market decide who gets what,” Mr Al Nahlaoui said.
“We launched it because our mission is to simplify the lives of people and the way you do that is to make sure everyone has the choice of getting in a car and moving from A to B. At every price point, you capture a different type of customer.”
The most common trips recorded during the pilot were for short distances. Mr Al Nahlaoui said: “There are a lot of people who can’t afford the price point of the [standard ride], so once you introduce a product that is 30 per cent lower you open [the service] up to a different customer.
"[The results] suggest people are using it for the first and last mile of trips – there's a lot of trips to the metro station so maybe you can't afford a Dh60 to Dh80 trip, but a Dh10 trip to the metro can save the walking distance. It's convenient."
Another reason for the introduction of a more accessible car type is to introduce innovative ideas like car-pooling, which Careem have already launched in Jordan and aim to introduce in Dubai next year.
“I think it’ll be popular here because Dubai is designed in a way where pooling can actually work,” said Mr Al Nahlaoui. Careem is currently working with the RTA to find ways to introduce the service. “Reducing the number of cars so there’s less congestion makes life happier for everyone in the city and studies have shown that during peak hours, the number of cars can be reduced by 50 per cent.
"Given the ambition of the RTA to introduce autonomous vehicles and innovative modes of transport, it's just a natural step and a stepping stone," he said.
The company is also working with regulators in Abu Dhabi to introduce the standard Careem service, hopefully in the first quarter of next year, which will be 30 to 50 per cent lower than the limousine service it is providing today. "The minimum trip in a limo is Dh40, so we'll get the [new service] closer to Dh15 or Dh20," he said.
“Unlike the west, who spent centuries and billions of dollars building transport infrastructure, we haven’t. We hit the pause button a couple of decades ago, which leaves us with a lot of white space when it comes to the transport landscape.”