All roads lead to Mideast for transport apps
MOBILITY AND LOGISTICS-RELATED SERVICES ARE FINDING ACTIVE INVESTOR INTEREST
Careem and Uber needn’t be the only road mobility apps you carry around on your smartphone. A new generation of apps is offering new transportation solutions, including logistics-booking services to ferry goods within the UAE and across Gulf borders |
Careem and Uber needn’t be the only road mobility apps you carry around on your smartphone. A new generation of apps is offering new transportation solutions, including logistics-booking services to ferry goods within the UAE and across Gulf borders.
Want to book a car for a 30-minute trip? Or even one of a lower duration? Check out the ekar app, which offers car leases at Dh30 an hour.
“The longest rental in ekar’s history has been six months, while the shortest has been 15 minutes. A top user booked a car 16 times over a 48-hour period,” said Vilhelm Hedberg, CEO and co-founder of ekar.
“It is a misconception that traditional car hiring [in the UAE] is easy. Every time you hire a car, you will need to provide copies of your Emirates ID and driver’s licence and sign multiple papers. Further, a large security deposit is blocked for up to 45 days on your credit card before you get it back,” he added.
Convenience
“Finally, rental cars are often in locations requiring additional travel [that is, taxi or metro locations] to get to. We have created an app[-based] sign-up process for every booking. So no need to do the same process over and over. With hundreds of cars parked throughout major city areas in the Gulf, the closest ekar is never far away.”
Such short-term leases are already quite popular in Europe, so much so that the concept has pulled in investments from even carmakers. The service has proved particularly popular with the millennial crowd... and the same is happening for ekar in the UAE.
“The majority of our user base is [in their] early 20s to late 30s,” said Hedberg. “We have over 500 cars on the roads in the UAE, ranging from economy cars to luxury. Our goal is to offer our customers cars to fit any occasion — like choosing an outfit in the morning.
“Ekar’s vision is for carshare members to outnumber car owners in the Gulf by 2025. By the end of 2018, ekar will have over 2,000 cars in the Gulf and over 5,000 by end of 2019.”
As such, car leasing — shortor long-term — has been one of the few bright spots for the UAE’s car retail sector in the last 18 months. New car sales dropped by well over 20 per cent during this phase, and the first six months of this year have proved particularly rough.
But while they baulk at picking up a new car, drivers don’t seem as reticent about leasing them. Industry sources suggest that demand for leasing continues to hold up.
Truck leasing
Car leasing isn’t the only one that has been generating user interest.
Apps that allow space booking on trucks and other commercial vehicles are pulling in orders as well as investor interest.
The promoters of Truxapp have had two successful rounds of funding as the app builds up traction with its intended clientele.
“The first round was internally funded, a year ago, and the second was just now, for Dh5 million from a UAE investor,” said Naseer Ahmad, one of the four co-founders behind Truxapp.
“In total we have been funded [to the tune of] over Dh20 million. We have had eight months of operations and for now [are] completely centred in the UAE. The service will soon be extended to the other Gulf states.”
What the platform offers is simple. Anyone wanting to make a shipment by road within the GCC can open the app and look up all the options and the suggested rates. Truxapp doesn’t own or operate any of the listed trucking services; instead these are all independent owners with cargo space to offer on their vehicles. Once a booking is made, the client can have real-time overview of their shipments. There are nearly 25,000 vehicles listed on the app, of various tonnage capacity. Usage by clients has hit the 8 per cent mark to date.
Being “asset-lite” is key to Truxapp.
“The trucking industry in the UAE is about $5.6 billion, based on estimates,” said Ahmad. “The addressable market for us would be about $5 billion — now, if we are able to take a single-digit market share, it would be a substantial business.”
(Truxapp, incidentally, is not a single app as such. In fact, there are four within the platform, including two specific to the supplier of the trucks.)
The addressable market for us would be about $5 billion — now, if we are able to take a single-digit market share, it would be a substantial business.” Naseer Ahmad | Director of Truxapp
Thinking beyond UAE
Eight months into the operations, Truxapp is thinking beyond the UAE.
“We want to be the conduit for the complete demand and supply side in trucking solutions,” said Ahmad. “Our platform gives visibility to both trucker and client, whether it’s moving steel or fast-moving consumer goods. Or whether they need to move containerised goods within JAFZA [Jebel Ali Free Zone] or cross-border.
“Over the next three to five years, if the same kind of market dynamics remain, the UAE will be about 30 per cent of our numbers and Saudi Arabia at about 50 per cent. We expect to see a profit within the next three quarters.
“For now, while the market itself may not be growing, we are. We want to become the one-stop shop for clients, whereby they don’t have to deal with different vendors.”