An unusual dispute is developing in Abu Dhabi between the authorities and the internet based taxi booking company Uber. There appears to be significant debate about the details of the dispute, which has resulted in both Uber and its chief rival Careem, suspending services.
Both companies operate a pre-booking system using the internet, and rumor has it that as many as fifty Careem and Uber drivers have been arrested. It is common practice for drivers to work for both companies, and they drive on a limousine, or general transport license, which seems to be one of the issues at the root of the dispute.
Uber which is a US based company, has exploded in popularity worldwide, and this new method of operation has totally transformed the taxi business. The older more established firms are struggling to cope with the new fast moving and aggressive Uber model. In the United Arab Emirates those taxi companies just so happen to be owned by the government or wealthy local families with influence.
A spokesman for Careem which is a Dubai-based company, that uses a similar booking system to Uber, said that many of its drivers had been stopped and detained by local authorities over “licensing issues.” As a consequence, many of the other drivers are now afraid to drive for Careem and so they have suspended their services pending clarification of the regulations.
Apparently, although this has yet to be confirmed officially, the arrests were due to Uber and Careem drivers contravening regulations by undercutting the prices that local limousine companies were offering. The Uber model has drawn criticism from Taxi drivers all over the world, as they feel that Uber drivers do not have to conform to the same high standards, rules and regulations that established companies have to abide by. According to the established companies, this then gives Uber an unfair advantage in business and pricing terms.
While services have been suspended in Abu Dhabi, they are still operating as usual in Dubai which is the main tourist area for the region. Uber have been operating in Abu Dhabi since 2013, and last year, the Middle East and North Africa were some of its fastest growing markets worldwide. Uber have invested a lot of money in the Middle East, ironically perhaps assisted by a $3.5 billion investment from Saudi Arabia’s public investment fund. These type of disputes seem to have plagued Uber regardless of the country, and while it is unlikely they will sell their business in the UAE, that is exactly what they ended up doing recently in China. Whatever the final result, it would appear that there is a need for both sides to get this matter resolved quickly.