Uber has uneven performance track in Gulf region

Sunday 16/10/2016

Abu Dhabi - The rapid rise of ride-hail­ing app Uber may repre­sent a global success story but in Gulf Cooperation Council (GCC) countries two very contrasting strands of its story are unfolding.

Not only has Uber’s emergence in Saudi Arabia led to the country’s investment arm putting $3.5 billion into the company, Uber is finding itself being styled as a vehicle for female empowerment, employment and even social reform.

In the United Arab Emirates, however, Uber is experiencing a bumpier ride. While the $60 billion firm points to “significant” growth in its Emirates’ operation and sees Dubai as a pivotal market, it claims red tape is standing in the way of it achieving its full potential. Its Abu Dhabi service was suspended in Au­gust after drivers of car companies working with it were detained.

This has created a challenge for Uber in a regional market where its reach and recognition are undeni­able. Across the Middle East and North Africa (MENA) region, Uber drivers covered 58 million miles in 2015, with rider growth leaping 500% between the first quarters of 2015 and 2016 and the number of drivers increasing fourfold in the same period.

Nowhere has it been better re­ceived than in Saudi Arabia, which, according to Uber Chief Executive Officer Travis Kalanick, represents “a great example of how Uber can benefit riders, drivers, and cities”.

With about 177,000 riders, Uber has it been embraced by Saudi offi­cials and its people since its launch in December 2014. It has been cred­ited with significantly improving ac­cess to education, jobs and entrepre­neurship opportunities throughout the country, especially for women, who are not permitted to drive and do not typically take public taxis.

As Saudi Arabia plans to bring 1.3 million women into its workforce by 2030 — more than doubling the pre­sent number — Uber is becoming a major factor in achieving that goal.

“The success we have seen is very interesting,” said Zeid Hreish, Uber’s general manager in Saudi Arabia. “We are tackling the very impor­tant issue of accessibility, allowing women to get access to education and employment, to start their own business, to move around cities.

“Around 80% of Uber riders in Saudi Arabia are women. If we are helping them to enter employment and gain education, that is really big for us.”

Uber is also supporting the gov­ernment’s focus on “Saudisation” as part of Riyadh’s National Trans­formation Programme — addressing 30% joblessness rates among young Saudis — by encouraging more Sau­dis to drive with Uber. About 1,000 of Uber’s 9,000 Saudi-based drivers are nationals and the company has set the ambitious target of bringing 100,000 more onto the platform in the next five years.

“We are very aligned with the country’s future, from a Saudisation point of view,” Hreish said. “This is because of the Saudi government, which wants to get Saudis into the workforce.

“They have been very helpful and the recent move to allow Saudis to work as private hire drivers has opened the floodgates for more Sau­dis to join the Uber platform.

“Saudis have been very interested in joining Uber. It is a flexible job that provides extra income while allowing them to work when they feel they need to. We have already had some major training sessions and when we look at the number of Saudis who are currently signing up with us, we believe we can defi­nitely reach the 100,000 figure we have set.”

Saudi Arabia and its cities, accord­ing to Hreish, are an exemplar for others in terms of the speed with which they moved to tap into Uber’s potential once they recognised it. That potential, he said, stretches be­yond everyday accessibility and into core community needs.

“The Uber app recently helped Saudi’s Ministry of Health deliver vaccinations by allowing them to reach a bigger audience,” he said, “such as women, people unable to get to hospitals, people who are busy and those living in remote ar­eas.”

Joanne Kubba, Uber’s head of policy for the MENA region, said she has seen first-hand how Uber has af­fected the lives of Saudis, especial­ly women.

“I think the government realised there were a lot of factors that Uber matched up to — getting women to work, getting teachers to universi­ties,” she said. “The mobility as­pect for women was tremendously powerful, and we have received tremendous feedback from so many women.”

Uber has admitted that, under the existing regulations, replicating its Saudi success in the UAE is hard to envisage. Christopher Free, general manager of Uber UAE, said the com­pany’s presence in the Emirates — 3,000 drivers and tens of thousands of requests each week — places the company in the position where it is “good, but could be great”.

Pricing rules and Uber being deemed a “premium product”, re­stricting the availability of some services such as UberPOOL, are two major hurdles. Under rules set by Dubai’s Roads and Transport Authority, Uber must keep its UAE rates at least 30% more than those of traditional taxis

The company is in discussions about easing some of the constraints but in Abu Dhabi it will soon have to adhere to new regulations that include requiring Uber and other ride-hailing services to register their apps, in an attempt to crack down on malpractices and black market­eering by drivers.

“There is definitely room for us to grow and for this to be a good busi­ness but for us to really make a dif­ference in terms of moving people around the city, things would have to change,” said Free. “We’re so well-aligned with what Dubai wants to be. Having key partners like Uber in supporting residential and tour­ism growth and helping the city to move is going to be hugely impor­tant.”