Tens of thousands of taxi drivers in Saudi Arabia could struggle to keep their livelihoods next year following the decision to allow women to drive, according to new research.
Frost & Sullivan's perspective on the lifting of the driving ban for women said a large chunk of the 100,000-plus taxis in the Gulf kingdom could be threatened.
"Although it’s been some time since conventional taxi drivers started losing female customers to Uber and Careem drivers, both categories of drivers will face tougher times as effective demand is likely to drop, starting next year," said the report.
"Despite a lot of families in the Kingdom still preferring taxi services as a more comfortable mode of transport, as many as tens of thousands of taxi drivers could struggle next year to keep their businesses afloat," it added.
Saudi Arabian women will be able to apply for driving licence from June 2018. This change is expected to deeply impact the landscape of the Saudi passenger car market and the way women population in Saudi Arabia approaches mobility.
Until now, women were largely dependent on family members, conventional taxi drivers or applications like Uber or Careem.
Frost & Sullivan estimated that up to 90,000-150,000 women would get driving licences in Saudi Arabia annually but initially these numbers can be even higher as many women would rush to pass the driving test.
"Even if 50 percent of women receiving the driving license will opt for owning a car (as opposed to sharing a family car or long-term rental), it would provide a solid boost to the new car market either directly or through used car purchases," the report noted.
It added: "There is no doubt that Saudi women have been influencing car purchasing decisions, especially when it comes to family cars. However, now a whole new segment will open up for automotive dealers: cars bought and driven by Saudi women. The automotive dealers will need to realign their customer engagement journey with the unmet needs of female buyers."
Frost & Sullivan said the increasing mobility of Saudi women and their higher degree of integration into country’s economy is expected to have a strong positive impact on the country’s economy.
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