The future of the car-sharing industry for the MENA region

Image: © AndreyPopov | iStock

Nicholas Watson, CEO & Co-founder of Udrive, provides insights on changing customer behaviour and innovation as a driving force for the car-sharing industry

Nicholas Watson explains why the car-sharing industry is set to boom amidst a climate of rocketing greenhouse gas emissions and a social shift towards sustainable transport.

Climate change affects every sector of society, and transport is no exception. According to a recent World Bank report, greenhouse gas emissions from the transport sector currently make up 20% of the world’s total emissions.

Furthermore, these emissions could increase by as much as 60% over the next three decades.

The MENA region (MENA is an acronym that refers to a grouping of countries situated in and around the Middle East and North Africa) has not taken this challenge lightly. The region has started to embrace cleantech, a growing trend that encompasses various sustainable technologies and practices.

Governments are also implementing initiatives to address climate change, such as the UAE’s Year of Sustainability. A rising number of people, particularly millennials, are making conscious efforts to reduce their carbon footprint.

An interesting transformation is underway in the transportation industry

An interesting transformation is underway in the transportation industry, and at the heart of this change is the global focus on sustainability. The transportation sector is a significant source of carbon emissions and environmental imbalances.

As the MENA region prepares to host the COP28 climate conference in the UAE, it becomes crucial to rethink, redefine and fundamentally transform our current mobility patterns.

The shift towards the car-sharing industry

At the core of sustainable modes of transport is car-sharing, which has emerged as a popular smart alternative to traditional car rentals and ownership.

The social shift highlights the unsustainability of traditional transportation and the need for more sustainable modes of commuting as consumer preferences change to prioritise convenience and sustainability. Industry forecasts predict that the car-sharing industry in the UAE alone will generate $82.52 million in revenue by 2023.

This development has the potential to significantly impact the future of transportation in the region by reducing traffic congestion, carbon emissions, and dependence on personal vehicles.

Car sharing has existed since the 1980s

Car sharing has existed since the 1980s, initially appearing in Switzerland and later in Germany, long before the sharing economy and digital age. The first industry to recognize this social shift and enter the car-sharing market were actually the car manufacturers themselves.

Today, the car-sharing industry in Dubai has the highest penetration rate in the Middle East region, representing 0.05% of the passenger car market, with it projected to quadruple within the next two years.

Changing consumer preferences is key to boosting the car-sharing industry

For many consumers, owning a car is no longer financially feasible, and they are turning to car-sharing platforms to save money and get better value.

The COVID-19 pandemic has also caused a drop in public transport usage as people avoid crowded spaces and opt for private or shared transport options. On-demand transport is becoming more attractive and viable, with some referring to it as the “Netflix for cars”.

Depending on the car-sharing service provider, customers can typically select a model, pay a fee for daily, weekly, or monthly usage and can cancel at any time.

This service particularly appeals to low to mid-income populations looking for an affordable mobility solution that allows them to pursue their aspirations, from entertainment activities to daily errands. While the impact of car-sharing in the region is yet to be fully realised, it can potentially improve access to mobility for many people.

The rise of smart technologies

What would smart mobility be without cutting-edge digital technologies that greatly enhance user experiences?

The digital revolution has transformed social and economic life, leading to widespread reliance on smartphones and applications for day-to-day functions such as mobility. With the click of a button, users can find, and book shared transport options, making transportation more accessible to everyone.

For car-sharing service providers, IoT technologies can be used to gather data from shared transport vehicles, enabling operators to optimise their services by reducing wait times, identifying the most popular routes, and adjusting service offerings accordingly.

Smart technologies also simplify booking shared transport and provide easier car access. One of the most significant benefits of smart technology in shared mobility is using smart cards and smart locks.

Smart locks are a vital technology for shared vehicles, allowing keyless entry and remote control of the vehicle. This improves the efficiency of shared vehicle use by reducing the time the vehicle spends idle.

Smart cards, on the other hand, enable users to access shared transport services without needing cash or credit cards, simplifying the booking process and enhancing the customer experience.

Envisioning a sustainable future

As we move towards a more sustainable future, we must begin steering the focus away from private car ownership towards shared smart transportation. About 85% of Riyadh’s eight million daily trips are taken by car, according to an independent study.

The transition to more sustainable transportation is particularly important in Gulf cities that were built around car dependency but now need to prioritise meeting their net-zero pledges. To achieve this, we need solutions that are efficient, cost-effective, and environmentally responsible to help people move from one point to another.

With the population of the MENA region expected to increase to 581 million in 2030 and almost double by 2050 to reach about 724 million, shared mobility alternatives can play a crucial role in improving air quality, promoting a balanced environment, and increasing accessibility to transport for underserved populations.

By reducing the number of private vehicles on the road, shared mobility can contribute to the region’s efforts to decarbonize and secure a safer, sustainable world for future generations.


This piece was written and provided by Nicholas Watson, CEO & Co-founder of Udrive.


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