UAE start-up Udrive, a car rental service platform, is expanding into Saudi Arabia to tap into the growing demand for affordable transportation.
In a statement on Monday, the company said it will first launch its app-based pay-per-minute and daily car rental services in Riyadh, the most populated city in Saudi Arabia. By 2023, it will roll out cars in other cities, including Jeddah, boosting its fleet to 1,500 vehicles in a year.
Udrive said that Riyadh, where the population is expected to nearly double to 15 million people by 2030, is a strong market for short- and long-term car leasing and rentals. Nine out of ten people (92%) in the Saudi capital currently use a privately owned vehicle to go to work or school.
"The traditional car rental market in KSA, the highest populated country and the largest economy in the GCC, is valued at approximately $1 billion and forecast to reach $1.18 billion by 2026," Udrive said.
Udrive's business model allows users to drive cars for as little as SAR 0.60 ($0.16) per minute or SAR 130 per day for up to 200 kilometres. The rate includes petrol, comprehensive insurance and "most" parking fees.
"As more businesses open offices in Saudi Arabia, we see an increasing appetite for car rental services in the KSA. There is also a growing passenger car market among a population where more than half are under 25 that is moving from ownership to usership," said Nicholas Watson, Co-founder and CEO of Udrive.
(Reporting by Cleofe Maceda; editing by Brinda Darasha)