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Ride Hailing Services in Abu Dhabi Suspended by Uber and Careem


08/29/2016


Ride Hailing Services in Abu Dhabi Suspended by Uber and Careem
In an apparent deepening of a regulatory spat, after the authorities detained some drivers working for Careem, ride-hailing apps Uber and Careem have suspended operations in Abu Dhabi.
 
After it emerged that some drivers had been stopped by police, they had temporarily stopped their services in the United Arab Emirates capital on Saturday, US-based Uber and Dubai-based regional rival Careem said.
 
While the local media in AbuDhabi reportedly claimed that up to 50 drivers working for the two apps had been arrested, one person familiar with the matter told some other news agencies and media houses that at least eight Careem drivers have been detained.
 
“Uber made the decision to temporarily suspend services due to some unforeseen circumstances. Our goal is to have operations up and running as soon as possible,” a spokesperson for the company said on Monday. At the time of arrest, none of the detained drivers had been working for its app, Uber said.
 
It is an established norm in the UAE that a large number of local drivers who are ion the business of driving and operating on limousine or general transport licences tend to often work for both the companies - Uber and Careem.
 
“Some of our cars were stopped and questioned by authorities. In order to not inconvenience our customers and captains, we decided to temporarily limit our services until we obtain more clarity on the situation,” said one Careem executive.
 
The long-established taxi companies in the United Arab Emirates, which are owned and operated by the government or influential local families are faced with strong financial challenge by the rapid rise in popularity and growth of the ride-hailing apps and services.
 
In recent times, ride hailing companies and their apps have faced legal challenges from entrenched interests as well as internal labour unrest and the arrests in Abu Dhabi and the resultant service suspension come amidst such a business environment.
 
Complying with licensing requirements that limit the number of drivers available for hire and a pressure for raising fares are the two issues that the Abu Dhabi regulators have been calling for ride-hailing apps and companies in private negotiations in recent times.
 
There were no comments made by the Abu Dhabi’s taxi regulator, the centre for regulation of transport by hire cars.
 
Despite the stalemate in AbuDhabi, Dubai, the region’s commercial and tourism centre have seen both Uber and Careem continuing to operate.
 
“This is a shame, the government should not want to appear Luddite,” said a banker in the capital who said he prefers an efficient app to regular taxis.
 
As Abu Dhabi seeks to diversify away from its dependence on oil revenues, it is investing in new domestic industries such as aerospace, finance, semiconductors and logistics.
 
Uber’s growth across the Middle East and north Africa and Pakistan have been outpaced by Dubai-based Careem, owned by Saudi and regional investors. However plans for a $250m regional expansion programme were laid out by Uber last year. A  $3.5bn investment from a Saudi sovereign wealth fund was laso received by it in June.
 
(Source:www.ft.com) 


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