About half of Dubai's 10,000-strong taxi fleet will be available to book through Careem’s ride-hailing smartphone app from August 29.
Transport chiefs said the new venture - called “hala” - will provide an even faster taxi service and take more privately-owned cars off the roads to cut traffic congestion.
People will be able to use credit cards to pay, see routes in advance and rate the drivers.
Dubai’s Roads and Transport Authority and Careem - which was bought by rival Uber for $3.1 billion (Dh11.39bn) in March - announced the move on Saturday.
It follows a trial of the service, which began in May, involving 2,000 of Dubai's cabs. From the end of August, customers can download the app and pick the "hala" icon to book a regular RTA cab.
“Launching ‘hala’ aims to […] increase efficiency, ease finding a taxi by booking through the app and lower the estimated time of arrival,” said Matar Al Tayer, director general of the RTA.
According to the RTA, the estimated time of arrival for Dubai taxis booked through the Careem app has reached about 4.5 minutes – a much-improved performance from the 12 to 14 minutes previously. Into September, it is hoped response times will be cut further to about three minutes.
When Uber bought Careem this year, many customers said they were worried prices could increase. Customers underlined that they wanted to see more, not less, competition.
Mudassir Sheikha, the chief executive of Careem, also welcomed the new service.
“It also means less down time for the captains [drivers] who can optimise their time on the road through ... real time alerts of geographical areas experiencing high demand,” he said.