Poplular Ride-hailing service Uber [UBER.UL] has signed an agreement with Dubai’s transport authorities on Wednesday, January 11, to become fully regulated after a series of clashes over pricing and availability.
The move signals friendlier relations between the government of the Gulf’s most popular business and tourist destination and what is becoming one of the best known global transport brands.
The two will also team up on a project to study how to cut congestion and the cost of transport in the Emirate, which Uber hopes will open up more business opportunities in the future.
Under the deal between Uber and the Roads and Transport Authority (RTA), Uber will be able to use 14,000 vehicles through its app “as per the laws governing the operation of taxis and limousines in Dubai emirate”, an RTA statement said.
Uber, which has a valuation of around $70 billion, has grown rapidly to more than 450 cities since 2009, fighting a series of battles with local regulators.
Present in Dubai since 2013, Uber has had shaky ties with the RTA partly due to a disagreement about pricing and whether it had to follow the path of local rival Careem and allow customers to book all taxi rides in the Emirate, not just its own.
Anthony Khoury, regional director of Uber in the Middle East, told Reuters the deal did not include providing customers with an option to book a regular taxi. The RTA made no comment about that aspect of their previous disagreements.
Previously, Uber, in which Saudi Arabia’s Public Investment Fund bought a $3.5 billion stake in June, had complained that Dubai’s regulations required it to price its rides 30 percent above taxi fares – a very large gap by international standards, Reuters reports.