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Why chauffeur-driven cars demand is growing in UAE

Despite the popularity of taxis, there is a growing demand for chauffeur-driven cars in the UAE, as more consumers increasingly look for better customer service and reliability.

According to Careem, a UAE-based company currently serving Dubai, Abu Dhabi, Doha and Riyadh, the chauffeur-driven car market in the country is already worth more than $1 billion and there is a significant room for growth.

The company recently announced that STC Ventures, backed by Saudi Telecom Company, has led a $1.7 million investment round in the company to expand the car booking service across the Middle East. Careem started its chauffeur-driven car booking service a year ago and has been seeing a growth of around 30 to 40 per cent in bookings every month. The demand comes from mid-high level income individuals, particularly business travellers, local residents and tourists.

“During the week days, we see a lot of people using us for business travel or for helping out with their school-runs. During the weekends, we are seeing the same sets of people using us for going out and about for leisure,” said Mudassir Sheikha, managing director and co-founder of Careem.

The company has a fleet of high-end models and promises to offer professional and courteous drivers who have the navigational technology call centre to rely on. Most of the cars available are Lexus ES350 and Audi A6s, although there are larger vehicles to choose from, such as the Toyota Land Cruiser and Toyota Previa, which prove useful for airport trips or for going out with friends and family.

“Currently, our volumes are split almost equally between business and consumer demand. In terms of growth, we are seeing a top-line increase of between 30 per cent and 40 per cent month-on-month,” Sheikha said.

“On the business side, we serve some of the largest professional service firms in the region offering them bespoke corporate rates and services. On the consumer side, we are signing up between 400 and 500 new users per week,” he added.

In terms of costs, chauffeur-driven cars are a more expensive alternative, with the price of a short trip doubling a normal cab fare. At Careem, a passenger who needs a car as soon as possible will have to pay a minimum of Dh40. For pre-scheduled bookings, the minimum is pegged at Dh75.

However, while taxis are readily available and cheaper, providers of chauffeur-driven vehicles assure they are more reliable.

“For example, if you have to be at the airport very early in the morning or your have an important meeting to attend, you cannot take the chance of not finding a taxi at the last minute or not knowing for sure how long your taxi will be until it gets you,” said Sheikha.

“For some residents in remote locations outside of the main residential areas of the city, directing taxis to location can be quite challenging and frustrating. These parts of the city may not be well trafficked by taxis, perhaps due to the low demand. And then there’s the peak times when there is a high demand for taxis and some people simply can’t get a ride,” he added.

Besides, Sheikha said, with their online booking service, user-friendly smartphone app and 24-hour call centre, their customers can book a car wherever they are. “For growing cities like Dubai and Abu Dhabi, where new locations are constantly springing up, it is crucial for people to be able to get where they need to go without relying on their knowledge of the city,” said Sheikha.