Will start-ups change the future for UAE transportation?

06 Jan 2020

Just a couple of years ago, it wasn’t a good idea to not own a car in the United Arab Emirates, though being able to afford one was another matter entirely.

While public transport options have increased and improved in the country over the years, bespoke transit alternatives were difficult to find, and being able to use a car without owning or at least renting it was a challenge.

However, the maturing ecosystem for start-up firms in the UAE has resulted in greater innovation within its transport sector, and a number of alternatives to traditional leasing choices and car ownership have begun to materialise.

The car-sharing phenomenon, which was popularised by work colleagues and college students in order to save on costs such as fuel, has been revolutionised by new technology that has simplified car rentals and become a hot business model.

Two car rental service start-ups have been launched in the UAE over the course of the last few years.

Udrive and Ekar, two app-based car-sharing services, enable their customers to drive their vehicles and pay by the minute, with $5m in Series B funding being secured by the former to drive expansion in the last quarter of last year.

$17.5m was also raised by Ekar in 2019 in another Series B round, with the company now servicing 50,000 bookings per month all over the UAE.

Electric vehicle sharing has also been introduced by the company, with a number of Tesla models having been added to its fleet, which is intended to become completely electric within the next five years.

Smart car rental services, which in Dubai are run by the emirate’s Roads and Transport Authority, expanded enormously last year, with 377,873 journeys being posted by the end of July, rising from 185,501 from the same period the year before.

This represents an astounding growth of as much as 103%.

The concept was furthered by Invygo, a start-up app-based subscription firm located in Dubai, which enables drivers to pick a vehicle, upload their driver’s licence, sign documents in the app, and have the car delivered to them for use.

The vehicle can also be returned just with the push of a button.

Invygo is currently operating only in the UAE but is hoping to expand into the GCC.

Cyacle, another start-up, this time based in Abu Dhabi with the support of the Khalifa Fund for Enterprise Development, has launched a completely automated bike-sharing service.

Stations can be found around Corniche Beach, Reem Island, Yas Island and Al Raha Beach.

Bikes can be rented out short term at any time with the use of a mobile app.

Cyacle has since been acquired by ride-hailing app Careem in order to expand its mobility offerings over the region.

UAE roads are also set to be populated by driverless cars by as early as next year, with regulations for such autonomous vehicles already being prepared.

25% of Dubai’s transportation is to become autonomous by 2030, if the Dubai Autonomous Transportation strategy is successful.

Anyone driving a car in the UAE needs to be covered by car insurance to ensure that they are financially protected in the event of accidents.