Competition is heating up between ride-hailing firms in the U.A.E. with both Uber and Careem looking to fortify their positions in Abu Dhabi—a market they were both suspended from two years ago.
Although Careem managed to restart its operations in the emirate, Uber is yet to relaunch in Abu Dhabi. The San Francisco- headquartered ride-hailing giant is, however, hopeful of resuming services in Abu Dhabi.
An Uber spokesperson told Forbes Middle East that the company is in “positive conversation” with The Centre for Regulation of Transport by Hire Cars (Transad). However, it has not decided whether or not to resume operations in the capital. Uber said that the current regulations on pricing make it difficult to operate an affordable and reliable service to Abu Dhabi. The company said that it aims to resume operations in the capital in a positive regulatory environment.
In August 2016, Uber and its Middle Eastern-rival Careem suspended services in Abu Dhabi after the authorities detained some of their drivers, citing that they were undercutting local taxi fares. Careem first started functioning in Abu Dhabi in March 2013 while Uber followed after six months.
Careem, though, does not seem to have any misgivings about cost like its rival. In early 2018, the Dubai-based ride hailing firm was in talks with regulators, allowing it to operate its service in Abu Dhabi at a much cheaper rate than it currently offers. Just a day ago, Careem started a more pocket-friendly car service called economic car service in Abu Dhabi, which will see fares drop to as much as 50%, with a minimum fare of AED19 ($5.13).
Abu Dhabi has had cheaper public transportation fares compared to the neighboring emirate Dubai. The emirate hiked its taxi fares last year after a gap of five years, bringing it in line with Dubai’s prices. Abu Dhabi will also start imposing a road toll, much like Dubai, though it has not specified the amount that will be charged or by when will the toll be implemented. Careem and Uber will need to factor such costs too when they operate in Abu Dhabi.
Also unlike other emirates, local taxis are often the residents’ preferred mode of transportation in Abu Dhabi. However, with taxi costs increasing, ride-hailing apps might be looking to snag a share of commuters who are willing to pay slightly higher fares for convenience.