A Year Later: How the Pandemic Has Affected Rental Car Companies in Dubai

Last year, the Covid-19 pandemic broke out and reached Dubai in March and April. Many business sectors were affected. An April 2019 survey of Dubai businesses found that 27% of CEOs expected to lose all their business in the upcoming month, while 43% of CEOs guessed six months. The non-oil private sector reached its nadir in November 2020.

One of those non-oil private sectors was the car rental industry. In many countries like Dubai, all rental car locations were closed during the lockdowns. Like other business sectors, rental companies struggled to figure out the next step after the lockdowns.  

In this new year, carmakers seem to be keeping the prices of newer vehicle models lower to help encourage buyers to purchase new vehicles after a slow 2020. But with inflation in every industry after a difficult year, many buyers are unable to afford to buy a new vehicle.

“Many are questioning why they should buy a new car,” said Michel Ayat, CEO of Arabian Automobiles Co. “There’s a shift to thinking about car ownership to user-ship – that’s a fact.”

The shift to user-ship could help rental car companies gain more customers. People could be more willing to rent a vehicle rather than purchasing their own vehicles. Additionally, because of the pandemic, more people probably prefer renting a vehicle rather than using public transportation.

A decrease in purchasing new vehicles and a concern for health consciousness and safety could lead to more opportunities for people to want to rent vehicles.

Ammar Akhtar is founder and CEO of Final Rentals Group, which specializes in car rental in Dubai and United Arab Emirates (U.A.E.) and has recently started franchising.