Women being allowed to take the wheel in Saudi Arabia has the potential to transform transportation in the country, from the types of vehicles sold to how they’re driven.
The market dominated by Toyota and Hyundai, and hulking sport utility vehicles big enough to haul around the whole family, probably will see an uptick in sales of smaller models, now that spouses will have more flexibility getting around. Companies hurt by the government liberalising its driver’s license law starting in June could include Uber Technologies Inc., which women have had to rely on along with hired drivers.
“This is very exciting,” said Rebecca Lindland, an analyst with car-shopping website Kelley Blue Book who worked in Saudi Arabia for more than two years. “It’s not going to be without obstacles, but it’s a huge step forward in terms of Saudi Arabia recognising the contributions that women can make to the economy.”
The royal decree by King Salman Bin Abdulaziz is the most dramatic move yet by his government, which is seeking to modernise the kingdom and render the nation’s economy less dependent on oil.
Saudi Arabia is the last country in the world to let women drive. Activists have repeatedly defied the ban, launching campaigns in which women have been filmed getting behind the wheel illegally.
Japan’s Toyota accounted for 32 percent of the 676,000 vehicles sold in Saudi Arabia last year, while South Korea’s Hyundai ranked second with 24 percent market share, according to Jeff Schuster, an analyst with LMC Automotive. The country ranks 21st out of the 198 markets the researcher tracks, he said.
Risks to road safety will be a concern because lifting the ban will add new, inexperienced drivers to Saudi Arabia’s streets, Lindland said. This could blunt the impact on ride-sharing services like Uber, at least at first.
Uber also could benefit from a new pool of potential drivers. The government also has a vested interest in seeing the company succeed - Saudi Arabia’s sovereign wealth fund is a major investor.
“We’re proud to have been able to provide extraordinary mobility for women in Saudi, and are excited by the economic opportunities this change could represent for them in the future,” Uber said in an emailed statement. About 80 percent of the company’s rides in Saudi Arabia are for women.
The other group that will see less demand are the thousands of drivers who work directly for families, many of whom are from Bangladesh or the Philippines, Lindland said. The policy change could shift the immigration patterns of the country if people no longer need the service, she said.
In a statement on King Salman’s decree, Saudi Arabia said agencies have been instructed to expand licensing facilities and driver-education programs to accommodate millions of new drivers. The challenges for some will be profound.
“You don’t really learn your way around because you don’t drive,” Lindland said, speaking from her own experience in the country. “You don’t pay attention because you’re in the back, or you’re in a shuttle bus. If you don’t drive, you don’t absorb.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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