Transport

Bolt’s UAE arrival rattles the ride-hailing market

December 20, 2024, 1:24 PM

A Dubai taxi on Sheikh Zayed Road. Estonian ride-hailing company Bolt will initially offer limousine services in partnership with DTC

Partnership with Dubai Taxi
Challenge to Careem and Uber
Dubai taxi sector worth AED6bn

The arrival of global ride-hailing platform Bolt in the UAE will shake up a market long dominated by Careem and Uber, the CEO of Dubai Taxi Company (DTC) said.

Estonian company Bolt, which operates in more than 600 cities and is present in Saudi Arabia, launched in Dubai this month in partnership with DTC, initially offering limousine services.

The next phase will integrate taxis into the Bolt platform, as it aims to disrupt a sector which has been free of any real competition for years.

“When you introduce any new application in the mobility market, it creates a buzz for the city,” DTC CEO Mansoor Al Falasi told AGBI.

“It puts pressure on other competitors… all of us will benefit from it.”

The collaboration with Bolt is expected to help DTC capture a larger share of Dubai’s AED6 billion taxi and e-hailing sector.

The state-owned operator, listed on the Dubai Financial Market, currently manages a fleet of 9,000 vehicles, including 6,000 taxis, and a workforce of 17,500 drivers.

Al Falasi said the introduction of Bolt would raise standards in the previously limited two-player market and lead to more affordable options for both drivers and riders.

“I can say [Bolt] is cheaper [for customers],” Al Falasi said, adding that drivers should also be happier with the fact that Bolt also takes less commission than existing players.

Drivers told AGBI that Bolt’s commission rate is 15.7 percent compared with the 35 to 38 percent charged by Careem and Uber.

Since its launch on December 2, Bolt has attracted around 12,000 drivers and 160 limousine companies onto its platform.

Careem, the UAE-founded ride-hailing platform acquired by Uber for $3.1 billion in 2019, has long been the dominant player in the market.

Its joint venture with Dubai’s Roads and Transport Authority (RTA), known as Hala, integrates rides from Dubai’s official taxis.

In addition to its mobility services, Careem has expanded into a “super app” backed by a $400 million investment from UAE telecommunications giant e& (formerly Etisalat), solidifying its position in the market.

Al Falasi said DTC is open to forming additional partnerships as Dubai works towards the government’s goal of transitioning 80 percent of taxi trips to e-booking platforms in the coming years.

DTC has established a 100 percent-owned subsidiary called Connected, which serves as a technology partner to explore further opportunities in the mobility space.

He added that DTC is studying the introduction of micromobility options, such as e-scooters and car rentals, and may expand Bolt’s services beyond Dubai in the future.

“Dubai is attracting people, companies, [and] investors,” Al Falasi said.

“This is a very clear message that Dubai is welcoming everyone.”

Dubai Taxi Company: facts and figures

In March 2024 Dubai Taxi Company announced that net profit for 2023 had surged 54 percent year on year to AED345 million ($94 million), as fleet size and trips increased.

DTC reported in July that it had approved a dividend payout of AED159 million ($43 million) for the first half of 2024 despite a marginal 1 percent increase in net profit.

Net earnings reached AED187.4 million in the first six months of the year, up from AED186.3 million at the same time last year, impacted by interest and the introduction of corporate tax.

Revenue grew 14 percent year on year to just over AED1 billion.

DTC listed on the Dubai Financial Market in December 2023, and its share price is up around 25 percent so far this year.