In an interview with us, the co-founder and CEO of Udrive, Nicholas Watson, stated that "mobility is a human right" and that the ability to move around is necessary for survival. The company has adopted this philosophy and made it its mission to provide mobility to everyone in the UAE, regardless of income level.
Nicholas Watson, CEO of Udrive
The pivot from traditional car rental to pay-by-minute
The company, previously known as AIMEX Car Rentals, started as a traditional car rental company with long-term weekly or monthly rentals. The idea for Udrive came about when the company realized it had a market gap — it was not able to support one of its employees who needed a car for a couple of hours because all of its cars were rented out for the long term. This led to the realization that there was an opportunity to push a portion of the fleet onto shorter-term rental. However, the traditional model of car rental, which involved human involvement in handing over keys, was not feasible for a business that aimed to provide rentals as short as one minute.
Thus, Udrive was born, with a completely digital interface that allowed customers to rent a car for as little as one minute or one meter. Interestingly, Udrive did not require external funding for its new business model, as it converted its entire business from traditional car rental to completely digital ‘pay-by-minute’ overnight.
An innovative and completely digitized business model
The company's innovative business model is based on providing on-demand car rentals through a completely digital interface, without the need for human involvement. Customers can pay for the rental by the minute or by the day, and the fee includes fuel, parking, and fully baked-in insurance. Udrive’s tagline, “Udrive, we take care of the rest,” aptly summarizes the company's approach to providing hassle-free car rentals. This model has been successful in the UAE due to the region's unique demographic and economic circumstances.
The UAE has a large ex-pat population, many of whom are middle to lower-income individuals who do not want to own a car but prefer to rent one on an as-needed basis. ‘Udrive’ offers an affordable and flexible solution to this market, allowing customers to use a car only when they need it, without the burden of long-term ownership or leasing.
To further simplify the rental process, Udrive has incorporated technology into its operations. Customers can refuel the car at any gas station, and Udrive will reimburse them with 15
Dirhams of free credit. So technically, Udrive incentivizes customers for refueling the cars. Additionally, the company pays for parking, regardless of where the customer parks in Dubai or Abu Dhabi. Customers no longer need to worry about paying for parking or taking out their phones to make payments.
The company's focus on providing accessible and affordable mobility solutions is rooted in its philosophy that "mobility is a human right". This philosophy is particularly relevant in the UAE, where public transportation options are limited, and car ownership can be expensive for many people. ‘Udrive’ aims to bridge this gap by providing a convenient, accessible, and affordable alternative to car ownership.
From self-sustained to funded, owing to Covid
However, ‘Udrive’ faced its biggest challenge when COVID-19 hit, and the UAE went into a strict lockdown, which resulted in the company being unable to operate for two and a half months. The company had to deal with the operational challenges that came with the lockdown, along with the sudden loss of revenue. To overcome this, the company had to raise funds from investors, and this was particularly challenging during the pandemic.
Despite the challenges, ‘Udrive’ was able to raise funds from investors who believed in them and proved to be successful in raising more funds through crowdfunding. This enabled the company to restart the entire capital-raising process and continue to expand its fleet of cars and operations.
Obsessed with customer experience
The company's success is also attributed to its focus on customer experience. Udrive has established a focus on customer experience by providing complete transparency on their pricing and avoiding additional charges. Watson says that they don't try to sell expensive cars, but instead inform their customers of parking options and additional charges upfront so that customers don't have to navigate through hoops to find out about them. Furthermore, the company does not charge surcharges, even during peak hours, which Watson believes is something that customers dislike.
He believes that the reason why other car rental companies don't adopt such a model is that their traditional business models have led to high commoditization, which means that they have to rely on additive costs, such as charging extra for an additional driver or excess waivers, to make more money. Udrive, on the other hand, is incentivized around pursuing a good customer experience by reducing the cost burden on customers.
The company also blends the cost of insurance into its pricing so that it can offer car rentals without asking for a deposit. Watson admits that there is some risk involved in this approach, but he believes that it's a risk worth taking, as the vast majority of their customers are good people who don't have any ill intent. He says that Udrive's business model is built around trust, which is
something that traditional rental companies often lack.
Watson emphasizes that adopting a customer-focused business model is not an easy journey, as it requires digitizing the business and building technology to handle all of the operational aspects. Udrive has done over 2.4 million trips since its inception, and it is still working on improving its customer experience through digitization.
The goal is to become the preferred choice of transportation
Udrive has big plans for the future of its company and the sector. Watson says that the company is already blowing minds with its current offerings, including no deposit, on-demand rental options. However, he suggests that this is just the tip of the iceberg, with plans to scale the company rapidly over the next decade.
According to Watson, Udrive's primary focus for the next year is on digitization and streamlining the customer experience to make renting a car as easy as possible. He envisions the company becoming so efficient that customers will choose Udrive over other forms of transportation. The company also plans to expand its presence across the GCC.
With 85% of Udrive's business coming from residents rather than tourists, Watson is confident that the company can withstand any global economic crisis that may impact the tourism industry.
As Udrive prepares to close its series B funding round, Watson is optimistic about the future of the company. With plans to scale rapidly and expand across the GCC, Udrive is poised to disrupt the car rental industry in the region and beyond.