Disruption hits the car rental industry

In an uncertain economy, why buy a new car? That appears to be the thinking behind the launch of two new Uber-style apps for rentals that allow users to pay as they go. Or maybe Instacar and Udrive are just catering to tourists. Either way, the apps look set to disrupt the city’s car rental industry. 

 

Both apps allow users to book and pay for cars. Instacar, launched in November by UAE national Mohammad Sharaf, offers a day rate of Dh133 for using the car for seven hours or more. Users can pick up and drop off cars at any of 30 locations across Dubai. A customer using the car for less than a day pays according to time used, at Dh19 an hour.

 

Either way, the car is reserved for that particular customer for the entire day, COO Manoj Kumar tells #GNTECH via email. “When the customer returns the car, we update the Dubai Roads and Transport Authority’s system accordingly,” he adds.

 

With Udrive, which introduced its app earlier this month, cars can be booked and paid for at a flat day rate Dh120. An earlier advertised rate of 50 fils per minute has been put on hold pending regulatory approval.

 

“Dubai’s ever-changing need for transport solutions, the transient nature of life and the overriding costs of car ownership make pay-as-you-go car rental a viable alternative,” says Hasib Khan, Managing Director of Udrive, which has a fleet of 50 Toyota Yarises. 

 

“For those who don’t want to commit to ownership or need a car every day, Udrive is the perfect option.”

 

So far, the companies have between 700 and 1,000 members each and both expect business to grow rapidly this year. Kumar hopes to have a registered user base of between 2,500 and 2,800 by the end of this year. Udrive, for its part, is far more bullish. “Considering that 1,000 members have signed up in the first two days, we are currently looking at around 5,000 members until the end of the year.”

 

Both companies expect to soon be able to expand their operations to other parts of the region, either via new branches or by taking the franchise route, but declined to say when.

 

The tech 

 

Access is keyless, via a mobile phone, and there’s free parking at key areas of the city where permitted, as well as free petrol, so there’s no bother of tanking up. When finished, the driver simply needs to leave the car at their destination, sometimes in a designated parking area, for the next driver to pick up.

 

What we’re loving here at #GNTECH is the way new connected technology enables operations for both companies. It’s the third industrial revolution at work and it’s changing the way business operates.

 

“Instacar works through state-of-the-art seamless integration of web services, GPRS and GPS technologies developed here locally in the UAE,” says Kumar. “The mobile application provides users with excellent convenience, security and access, similar to several up-and-coming integrated technologies.”

 

He says with all the technology being developed in the country, the firm is something of a UAE tech success story. 

 

“There is an abundance of talent in the UAE, both local and expatriate. It was a matter of focused working towards our requirements to develop something new for the first time in the Middle East. It was not easy and we faced multiple challenges and failed several times, however we did overcome the same. The systems are still evolving as we strive for improving the user experience even more.” 

 

Udrive, for its part, uses solutions developed and tested in Germany that Khan says are simple for drivers to operate. 

 

How-to

 

Both companies require users to register at their websites. Everything else is done via the app. 

 

In the case of Udrive, once you’ve got the app, you need to find the closest car, book it and head towards it. You would have about 15 minutes to get to the car. 

 

Once you’re there, unlock the car via the app and jump in. Inside the glove compartment is a keypad, enter the PIN that shows up on the app and unlock the keys. Once you finish gallivanting around Dubai, hook the keys back into the keypad and that’s it.

 

The law

 

We got in touch with the Roads and Transport Authority (RTA) in Dubai to enquire whether there are any regulations that car rental companies like these would have to adhere to.

 

“RTA, together with specialised consulting services, had been considering the smart leasing system over the past period in a way that is compatible with activities in order to achieve transport and leasing integration in Dubai and encourage the use of various means of transport,” says Nasser Abu Shehab, RTA’s Acting CEO of the Strategy and Corporate Governance Sector.

 

“The new legislation governing car-hiring activity on hourly basis is expected to come out soon, taking into account the public interest of all parties, and to realise the objectives and goals of such activity in the public interest.”