RTA’s taxis and limousines to be available via the Careem app.

Jojo Puthuparampil is a business news writer for Inc. Arabia.

Dubai’s transport authority has signed a pact with ride-hailing service Careem to provide taxi and limousine services in the emirate through the latter’s app, it said in a statement.

As per the agreement signed between The Roads and Transport Authority (RTA) and the ride-hailing service, Careem will provide passenger transport services online or via a smart app, Arabian Business reported.

This means that users can now book the RTA’s 9,841 regular taxis and 4,700 limousines via the Careem app.

Dubai’s RTA and Careem did not reveal the pricing details of their deal, but said that it would involve no additional costs for customers.

Pressure on Uber

Mattar Al Tayer, director-general and chairman of the RTA, said that the authority wants other online booking companies to join its drive aimed at delivering smart services to customers.

“Any e-hailing service that wants to continue working in Dubai must sign an agreement with us. Why? To have control of tariff and to have control of safety,” RTA director-general Mattar al-Tayer told Reuters.

He said other ride-hailing services would have to sign similar agreements with the regulator by next March to continue operating, presumably hinting at Uber, the only other e-hailing service operating in Dubai.

“This does give us access to a much bigger fleet of cars, so we believe it gives us a significant advantage over competitors,” Careem’s co-founder and managing director Mudassir Sheikha said of his deal with the RTA.

In August, Careem and Uber abruptly stopped operating in Abu Dhabi. Both companies have kept tight-lipped about the reasons for this and it is yet unclear if both have fully resumed operations in the Emirati capital.

In a statement to Reuters, Uber said it had been in discussions with the RTA for the last two years on how it could make Uber more available to riders in Dubai.

The firm has not explicitly said that it would be willing to sign a deal similar to Careem’s, noting that Dubai’s regulations required it to price its rides 30% above taxi fares—a very large gap by Uber’s international standards.

“This has prevented us from offering the same level of service, and long-term solutions, as seen by riders in over 450 Uber cities around the world,” Uber told Reuters.

It is also said that Uber is concerned about data-sharing, which could be a possibility after the RTA starts its own integrated transport application.

In July, RTA said it will be launching a common booking and payment application integrating all methods of transport with its own series including Monorail, Dubai Trolley as well as e-hail or mobile app-based taxi services.

The new Integrated Mobility Platform (IMP) will allow users to pay for  e-hail services such as Uber and Careem, the Monorail in Palm Jumeirah, Dubai Trolley in Downtown Dubai and private limousine services alongside the RTA’s own services.

Careem steps up

Last week, Careem said is in talks with potential investors for raising a fresh funding round. It is also targeting profitability next year or in 2018, co-founder and managing director Mudassir Sheikha said.

The company claims  a larger market share than rival Uber in most of the 32 cities in the Middle East, North Africa and Pakistan region where it operates. It plans to expand to fresh markets including Oman and a number of North African countries, Sheikha said.

Careem also recently unveiled its new brand identity, marking its four-year anniversary. The rebranding is an attempt to build an offline presence that will complement its online presence, the firm said

Launched in 2012 by Sheikha and fellow McKinsey & Co alumni Magnus Olsson, Careem has a fleet of more than 90,000 drivers as of date. It also claims to have more than four million users registered through its mobile app. Its largest markets are Cairo, Karachi, and Riyadh.

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