New Regulations Put UBER & Careem’s Dubai Future In Doubt
As if the the existing levies, the healthy competition of of two major players in the App car service companies, coupled with the resurgence of Dubai Taxi weren’t enough. There is also the story that UBER and Careem being blocked in Abu Dhabi due to the detention of drivers working for Careem. Now, in the same week they launched UBEReats service, new regulations in Dubai are posing a threat to the future of UBER. Reports in The Financial Times suggest that the RTA is demanding that both UBER and Careem comply with new regulations, that include an extra 5 AED per fare surcharge.
A report in Friday’s FT questions the future of UBER in Dubai, and the same rules apply to Careem
This is on top of an exiting 30% charge
‘This levy, coming on top of a pre-existing requirement to charge 30 per cent more than taxi services, threatens the thin margins of Uber and Careem in Dubai and could force them to refocus investment to other markets.’
The Financial Times
‘It’s difficult for us’
‘We would love to invest in Dubai – it is a city that really fits with a company like Uber in many aspects including technology, but clearly it is difficult for us today to provide in Dubai a service that fits our vision to provide affordable and reliable transportation’
The threat posed companies like UBER to state owned transport services isn’t unique to places like Dubai.
However, we are seeing massive growth of UBER and Careem in Cairo and Riyadh, it is a wonder why they can’t experience the came ‘welcome’ in Dubai. If nothing else, tourists welcome familiarity in app services when they travel, and it can only be good for the holistic service and technology business if companies like UBER and Careem thrive in Dubai. That said, that shouldn’t be enough for a free ride, and like all companies, there are rules to comply with and levys to pay. Let’s hope both companies take this new levy on the chin and continue to offer great service to people of Dubai.