UAE Car Rental Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

UAE Car Rental Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

United Arab Emirates car rental was valued at USD 885.83 million in 2021 and expected to surpass a net valuation of USD 1,729.80 million by 2027 end, registering a solid CAGR growth of 11.8% during the forecast period.

The COVID-19 pandemic has partially affected the market for the United Arab Emirates car market with strict lockdown and a decrease in traveling to restrain the spread of the virus. However, with an increase in the number of tourists visiting the UAE, the demand for car rental services has picked up the pace by the end of 2021 and is likely to continue over the forecast period.

Consumer preferences shifted as a result of a variety of circumstances. Most notably, health concerns drove people and families to hire vehicles rather than public transportation. The rise of digital platforms in the marketplace has also facilitated the selection of cars for hire or leasing.

Significant growth in the population of individuals traveling for business and leisure travel is driving demand for car rental services. Rising internet penetration across the country has enabled enterprises in the sector to attract a wider consumer base through the use of smart mobile applications for customer convenience.

Key Highlights

• Udrive, the app-based pay-per-minute car rental service, has announced a USD 5 million Series B round of funding, in which it will welcome commercial, institutional and private investors. Such funding will positively impact the market growth in the upcoming years.

Thus, growing commercial events and reviving tourism activities will positively impact the market growth during the forecast period.

UAE Car Rental Market Trends

Growing Demand for Travel to Propel The Demand

The emergence of staycations is a new trend in the travel and tourist sector. This relatively new concept defines a blend of leisure and business travel and is gaining traction.

Bringing the family on professional travels is becoming more accepted as businesses embrace this trend to promote staff retention and relieve some of the stress of crucial road warriors. As younger employees become more business travelers, this incentive is becoming more tempting to recruiters. This idea is especially useful for abroad visits where employees may become familiarized with areas, especially significant business specifics.

The expansion of the car rental business is favored by the country's stringent government laws on car buying and driving. Using public transit may be inconvenient and unexpected. Moreover, cities such as Dubai require long distances to visit tourist attractions. Furthermore, public transportation does not provide an end-to-end journey, which is particularly inconvenient for visitors.

Players in the market are coming with convenient plans for their users to attract new customers and gain market share. For instance,

• In February 2021, self-driving vehicle platform, ekar, launched a new subscription-based program for its users in the Middle East. The portal's customers in the United Arab Emirates and Saudi Arabia can book cars ranging from economy to luxury for a period of one month to nine months.

Taxis, passenger cars and charter vehicles with flexibility and other features such as real-time feedback, vehicle monitoring, and rating to end clients are on the rise. Numerous smartphone applications make it easier to find available automobiles and compare rates with the respective car rental businesses. Such development has also positively impacted the market growth during the forecast period.

Online Booking Services to Gain Momentum

Car rental services in the UAE provide booking options on a mobile app or website of a cab company. Further, the option of an online mode of payment has eased the process. The prominent factors driving this ecosystem are affordability and ease of access to the services. The demand for car rental is escalating due to on-demand payment from customers for convenience and affordability.

Online booking mode has several advantages and numerous transparency-related issues that are continuously monitored and rectified by companies. The day-to-day operations of car rental companies are managed through a centralized system. Compliance policies, rules, regulations, and terms and conditions are followed, which often differ from one company to the other. Furthermore, the payment process for booking is managed by mediators or any third-party organization. With more entities engaged, this becomes a problem and creates a lack of transparency. For instance:

• In November 2021, EzzeCar launched as a virtual marketplace for car rental companies to sell their vehicles and manage their fleets, with the goal of being a one-stop-shop for car renters to obtain vehicles that match their needs. The platform provides vehicles ranging from inexpensive to luxury and sports automobiles.

Considering the aforementioned factors, demand for online booking mode is expected to witness more prominence during the forecast period.

UAE Car Rental Industry Overview

Some of the prominent players in the United Arab Emirates Car Rental Market are SixtSE, The Hertz Corporation, and AVIS Rent a Car, among others. As the rental car demand is growing in the country, car rental service providing companies are expecting development interms of online and offline services to feliciate the consumer shifting behaviours.

Moreover, several strategies have been adopted by the players to robust their connectivity for car rental and update their present fleet with more vehicles to address rising consumers demand in United Arab Emirates.

• In 2022, Uber has set an aim of one in every four journeys requested via the Uber app in the UAE being emission-free by 2030.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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