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Taxi shortage latest threat to Dubai boom

by This email address is being protected from spam bots, you need Javascript enabled to view it  on Monday, 14 July 2008
CHRONIC CONGESTION: The lack of taxis in Dubai and traffic congestion is costing the economy and putting visitors of the city. (Getty Images)

Dubai’s lack of public transport, and in particular the shortage of taxis, has emerged as the latest threat to the long-term sustainability of the booming Gulf Arab city.

Business execs and tourists, of which six million visit Dubai every year, are increasingly complaining about the time spent standing in searing temperatures and competing with a dozen other people for the odd taxi that passes by.

The situation has got so bad that some are even talking about not returning because of the traffic nightmare.

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“This is the worst city for taxis that I have seen,” Bala T.R., a 43-year-old chartered accountant from India, told newswire Bloomberg.

“It gets worse each time I come,” he said, adding that if Dubai did not sort the problem out he would not be coming back.

Bala, who visits the city around four times a year, said he spends an hour on average waiting for a taxi, while Azimullah Azizullah, managing director of a Dubai-based shipping firm, put the wait at two hours on the street and half an hour at places like malls.

And then there is the prospect of sitting for hours in bumper to bumper traffic. According to Dubai’s Roads and Transport Authority (RTA), traffic congestion is costing the city’s economy around 4.6 billion dirhams ($1.25 billion) a year in lost man-hours.

But it is not simply a lack of taxis causing the problem. In fact Dubai has more taxis per person than most other major global cities.

According to Bloomberg, Dubai has around 4.9 taxis per 1,000 people, compared to 4.7 in Tokyo, 2.7 in London and 1.6 in New York.

The problem has more to do with the city’s lack of public transport, soaring temperatures that can reach as high as 50 degrees Celsius in the summer months, and the cheap price of fuel, according to analysts.

“So far, Dubai doesn't have any public transport system worth mentioning.” Eckart Woertz, chief economist at the Gulf Research Centre in Dubai, told the newswire.

“The way it is, traffic is a serious disadvantage for Dubai as a place to do business.”

The government has recognised the problem and the RTA plans to spend 52.5 billion dirhams over the next five years to improve road, bus, rail and marine transport, including construction of a metro that is set to come online next year.

Abdul Aziz Malik, chief executive officer of Dubai Taxi, one of the major taxi operators in the city, said the investment should go some way to easing the shortage of cabs.

“That should help ease the problem,” he told Bloomberg.

However, analysts question whether the improvements will be enough to solve Dubai’s traffic problems, given the climate and other factors.

Blair Hagkull, regional managing director for real estate consultancy Jones Lang LaSalle, said even when the metro opened it would still be difficult to get motorists to give up their cars.

“The metro is not a panacea,” Hagkull told Bloomberg. “It will be the catalyst.”

The RTA was not immediately available for comment when contacted by Arabian Business.

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