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Middle East Ride Hailing Services Market Valuation to Grow Fast and Reach USD 12.40 Billion By 2032


New Delhi, July 08, 2024 (GLOBE NEWSWIRE) — According to the latest Astute Analytica research, the Middle East ride hailing services market is projected to hit the market valuation of US$ 12.40 billion by 2032 up from US$ 4.29 billion in 2023 at a CAGR of 13.4% during the forecast period 2024–2032.

The ride-hailing market in the Middle East, particularly in Saudi Arabia, UAE, Kuwait, and Qatar, is experiencing significant growth and transformation. Saudi Arabia is expected to capture the second largest market share in the Middle East and Africa region. The UAE’s market shows promising growth and holds dominant position. Wherein, the user penetration in the UAE is expected to hit 4.03 million by 2028, reflecting a 40.8% penetration rate, while the overall MENA region is set to have around 125.60 million users by the same year.

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Several factors drive this robust growth of the Middle East ride hailing services market as high smartphone penetration rates, which are around 80% in the UAE, facilitate the frequent use of ride-hailing applications. Additionally, the increasing urban population—64% in the MENA region—coupled with severe traffic congestion in major cities, boosts the demand for ride-hailing services. The cost-effectiveness of these services, being 20% cheaper than traditional taxis, further adds to their appeal. Safety and convenience are primary factors attracting users, with 70% of users choosing ride-hailing for safety and 65% for convenience. The growth of tourism, especially in the UAE and Saudi Arabia, also significantly influences market expansion.

Despite the growth, the Middle East ride hailing services market faces several challenges. Regulatory hurdles and legal uncertainties create barriers to expansion, and passenger safety concerns question the reliability of ride-hailing platforms. Additionally, inadequate infrastructure, particularly in terms of road quality and navigation systems, poses operational challenges. However, the market leaders, such as Uber Middle East with its monopolistic presence and Bolt Technology OU with a 15.99% market share, continue to dominate. The emergence of local players, adapting services to regional needs and cultural nuances, adds to the competitive landscape.

Technological advancements and strategic partnerships are shaping the future of ride-hailing services in the region. The integration of AI and predictive analytics enhances service efficiency, while the adoption of contactless payment methods improves user experience. Strategic partnerships with public transportation services and local businesses have bolstered convenience and accessibility. Looking ahead, the integration of autonomous vehicles, focus on sustainable mobility solutions, rise of micro-mobility services, and the introduction of subscription and loyalty programs will likely drive further innovation. Collaborations with city authorities are also expected to contribute to smart city initiatives, ensuring sustainable growth in the ride-hailing market.

Key Findings in Middle East Ride Hailing Services Market

Market Forecast (2032)US$ 12.40 BillionCAGR (2024-2032)13.4%Travel Type (2023)Intracity (77.5%)Payment Method (2023)Credit/Debit Card (50.6%)Car TypeStandard Cars (63.4%)Top Trends Autonomous vehicle integration and advanced AI-driven ride-hailing technologies.Expansion of electric vehicle fleets to reduce carbon emissions.Growth of super apps combining multiple services including ride-hailing. Top Drivers Increasing urbanization and demand for convenient transportation alternatives.High smartphone penetration facilitating ease of access to ride-hailing apps.Government initiatives promoting smart cities and digital transformation. Top Challenges Regulatory hurdles and compliance with local transportation laws.Competition from traditional taxis and emerging ride-hailing startups.Ensuring safety and security for passengers and drivers.

Dynamics of Ride-Hailing Services in the Middle East: 2024 Insights

The ride hailing services market in the Middle East is experiencing rapid growth, driven by urbanization, technological advancements, and increasing smartphone penetration. The region’s high urbanization rate, with 70% of the population living in cities, has created significant demand for efficient transportation solutions. The UAE and Saudi Arabia are leading the market, with the UAE’s market alone expected to expand at a CAGR of 15%. The high smartphone penetration rate, particularly in the UAE (80%), facilitates the widespread use of ride-hailing apps. Additionally, the young population, with over 60% under 30 years old, prefers modern, tech-savvy transportation options. Safety and convenience are major drivers, with 70% of users citing safety and 65% citing convenience as reasons for using ride-hailing services. The average cost of ride-hailing is also 20% lower than traditional taxis, making it a more attractive option.

Technological advancements are revolutionizing the ride hailing services market in the Middle East. Companies are leveraging AI, GPS, and mobile technology to enhance service efficiency and safety. AI optimizes pricing and demand prediction, while GPS enables accurate ride matching and real-time tracking. The integration of electric and hybrid vehicles is also on the rise, contributing to sustainability efforts. The market is further bolstered by regulatory support and market liberalization, which have facilitated the entry and expansion of global players like Uber and local firms like Careem. The intracity segment is expected to grow at the highest CAGR of 14.4% during the forecast period. The adoption of digital payment methods is also increasing, with credit/debit cards leading the market with a revenue share of over USD 2,172.2 million in 2023.

Intracity Travel in the Middle East is A Dominant Revenue Powerhouse, Generates Revenue of over US$ 967.2 million

The Middle East’s urbanization rate has soared, with 70% of the population now residing in cities as of 2024. This shift has significantly boosted the demand for intracity travel in the ride hailing services market. In cities like Dubai and Riyadh, daily intracity commutes account for 65% of all travel activities. Convenience, time efficiency, and the rapid expansion of ride-hailing services are primary drivers. Ride-hailing apps have seen a 40% increase in users over the past year, particularly among millennials and Gen Z. Additionally, local governments are heavily investing in smart city initiatives, with $12 billion allocated to urban mobility projects in 2023 alone, enhancing public transportation networks and integrating ride-sharing services.

The tourism boom further amplifies intracity travel demand. The Middle East welcomed 60 million tourists in 2023, a 15% increase from the previous year. Cities like Dubai, which hosted 25 million tourists, have seen a 30% rise in ride-hailing requests during peak tourist seasons. Tourists prefer the convenience and reliability of ride-hailing services for intracity travel, contributing to a 20% year-on-year revenue growth for companies like Careem and Uber. Furthermore, the average tourist spends approximately $200 on ride-hailing services during their stay, underscoring the sector’s lucrative potential.

Several other factors fuel the intracity travel surge in Middle East ride hailing services market. E-commerce growth, with a projected market value of $50 billion by 2025, necessitates efficient urban logistics, driving demand for delivery services within cities. Moreover, the rise of remote work and flexible job markets has led to increased freelance and gig economy participation, with 35% of the workforce engaged in freelance activities, often requiring frequent intracity travel. Additionally, cultural and entertainment events, which saw a 25% uptick in attendance in 2023, further boost intracity mobility needs. These combined elements make intracity travel a dominant revenue stream, outpacing intercity travel, which remains limited by higher costs and longer travel times.

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Credit/Debit Cards Remains the Popular Payment Choice Among Ride Hailers in the Middle East Ride-Hailing Market, Accounts For over 50.6% Market Share

The Middle East ride hailing services market is experiencing a significant shift towards digital payment methodologies, with credit and debit cards leading the charge. In 2023, this segment accounted for over US$ 2,172.2 million in revenue and is projected to grow at a CAGR of 13.6% during the assessment period. This dominance is driven by several factors, including increased access to digital banking services, with over 60% of the population owning either a credit or debit card. The adoption of these cards is further propelled by their perceived safety compared to cash, addressing broader safety concerns related to personal finance in the region. The region’s economic growth, supported by technological advancements, also plays a crucial role in this trend.

The surge in digital payment methods is particularly notable in GCC countries, where 70% of the population now has access to banking services, and credit and debit card ownership exceeds 60%. This growth is underpinned by robust financial infrastructures and government initiatives aimed at promoting cashless economies. For instance, Saudi Arabia’s “Vision 2030” plan aims for 70% of transactions to be non-cash by 2030. Convenience is another significant factor driving this trend in the ride hailing services market.  A recent survey indicated that 65% of ride-hailing service users preferred card payments due to their ease of use and time-saving benefits. Additionally, the integration of digital wallets and mobile banking apps has simplified the payment process, making card usage more appealing.

Security concerns also drive the preference for card payments. Cash transactions are often targeted by fraudsters, making credit and debit cards a safer alternative. By opting for card payments, users can mitigate risks associated with theft-related crimes, such as mugging. Furthermore, the increasing availability of contactless payment options and secure authentication methods has enhanced consumer confidence in using cards for ride-hailing services. As Middle Eastern societies continue to embrace technological advancements and prioritize financial security, the dominance of credit and debit cards in the ride hailing service market is set to grow even further.

Standard Cars to Keep Dominating Middle Eastern Ride Hailing Services Market, Generates Over US$ 2,723.0 Million

The ride-hailing market in the Middle East has witnessed a significant preference for standard cars over other vehicle types, such as electric vehicles (EVs), SUVs, luxury cars, and bikes/scooters. This dominance is driven by a variety of factors, making standard cars the most desired choice for both operators and users. Firstly, the economic efficiency of standard cars plays a crucial role. As of 2024, the average fare for a standard car ride in the region is 30% lower than that of SUVs and 50% lower than luxury vehicles. This affordability appeals to the mass market, where 65% of users prefer cost-effective transportation options. Additionally, maintenance and operational costs for standard cars are significantly lower, with a 40% reduction in servicing costs compared to SUVs and a 60% reduction compared to luxury cars. This cost-effectiveness is vital in a region where 75% of ride-hailing companies operate on thin profit margins.

Moreover, the infrastructure and environmental conditions in the Middle East favor the use of standard cars in the ride hailing services market. With temperatures often exceeding 40°C, the reliability and durability of standard cars are critical. According to a 2024 report, 80% of vehicles on the road in the Middle East are standard cars, reflecting their ability to withstand harsh climates. Furthermore, the region’s road network is predominantly designed for standard cars, with 70% of urban roads optimized for these vehicles. This compatibility enhances the efficiency and safety of ride-hailing services, as standard cars are less likely to encounter issues related to road conditions. The absence of widespread EV charging infrastructure, evidenced by only 5% of gas stations offering EV charging points, further cements the practicality of standard cars over electric alternatives.

The consumer preferences and regulatory frameworks contribute to the popularity of standard cars. In a survey conducted in 2024, 60% of ride-hailing users in the Middle East expressed a preference for standard cars due to their familiarity and comfort. Regulatory policies also play a part; 80% of the region’s ride-hailing regulations are tailored specifically to standard cars, providing streamlined licensing and operational procedures. This regulatory support, combined with the economic and infrastructural advantages, ensures that standard cars remain the dominant force in the Middle Eastern ride-hailing market.

Top 3 Players in Middle East Ride Hailing Services Market Capturers Over 55% Market Share: Uber Takes the Charge with Over 43% Market Share

Uber has firmly established itself as the leader in the Middle East ride-hailing market, primarily through strategic acquisitions and technological advancements. The acquisition of Careem in 2019 for $3.1 billion was a game-changer, merging resources and expanding Uber’s footprint across the region. This move allowed Uber to leverage Careem’s local expertise and established presence, creating a dominant entity in the Middle East, Africa, and South Asia. By maintaining separate operations for Careem, Uber effectively caters to diverse customer needs. Investments in technology, such as real-time ride tracking, cashless transactions, and varied vehicle options, have enhanced the user experience, further solidifying Uber’s market position.

Uber’s continuous innovation and strategic partnerships have played a crucial role in maintaining its competitive edge in the ride hailing services market. High smartphone penetration rates in countries like the UAE and Saudi Arabia have facilitated the widespread adoption of Uber’s services, while partnerships, such as the agreement with Al Futtaim Electric Mobility Company, align with regional sustainability goals. Uber’s ability to adapt to local contexts and engage proactively with governments has also bolstered its market dominance. By focusing on safety, convenience, and cost-effectiveness, Uber resonates well with the region’s young, tech-savvy population, ensuring its continued leadership in the Middle East ride hailing services market.

Middle East Ride Hailing Services Market Key Players

Uber Technologies, Inc.Careem (Acquired by Uber Technologies, Inc.)Bolt Technology OÜOlaDiDiTalixoOther Prominent Players

Market Segmentation Overview:

By Travel Type

By Payment Method

Credit/ Debit CardsDigital WalletsCash

By Vehicle Type

Standard CarsLuxury/SUVBike/ScooterElectric Vehicles

By Country

UAESaudi ArabiaBahrainOmanQatarRest of Middle East

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