Saudi: Taxicabs booked through app increase fare by up to 20%

JEDDAH — Taxicabs booked through ride-hailing apps have increased their fares between 5% and 20% starting Feb. 1, local daily Al-Madina reported on Monday quoting market sources.

In a message to its clients one of the companies said it has increased fare so as to make up for the hike in fuel prices and the implementation of Value Added Tax (VAT).

The sources did not identify the company, but said it told its customers that an increase of at least SR5 will be made on every trip.

Earlier, responding to an Arabian Business query about the potential fare increases, co-founder and chief product officer of Careem Abdulla Elyas said upcoming fare hikes by Careem in Saudi Arabia are a response to financial pressures on their drivers and increased operating costs including value-added tax (VAT).

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A number of clients expressed their dissatisfaction over the decision and said the fare increases were not commensurate with the rise of fuel prices or VAT.

They said a single trip would now cost SR10 more than what it cost earlier for the same distance.

Many customers even claimed that some companies increased their fare seven-fold to reach SR70 at peak hours instead of SR10.

Obaid Al-Abdali, professor of marketing at King Fahd University of Petroleum and Minerals, said the Saudi market is a free market where every company can increase its prices but this increase should be within the acceptable limits. A number of captains of Careem and Uber have asked their companies to review fares so as not to cut on the margin of their profits.

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Source Credit: Saudi Gazette

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