Saudi Arabia Taxi Operation Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024-2030)

Saudi Arabia Taxi Operation Market Trends and Growth Drivers

Adoption of Electric Vehicle Is Key Trend in the Market

• The adoption of electric vehicles is a key trend observed in the market. According to the German-Saudi Arabian Liaison Office for Economic Affairs (GESALO), electric vehicles are still rare in Saudi Arabia, but it is expected that the number can rise to 1–2 million by the end of 2030.
• In addition, the government of Saudi Arabia is paying attention to reducing carbon emissions, which is encouraging the adoption of electric vehicles in commercial transport, including taxis. Taxi operators are increasingly investing in EV fleets to fulfill consumer demand for eco-friendly transportation options.

Government Initiatives are Drivers of the Market

• The increasing number of government initiatives is the key driver for the market. The government is making efforts to promote tourism via “Saudi Vision 2030” initiatives. The government of KSA is developing places to attract tourists, such as NEOM and the Red Sea project, which would drive the demand for taxi services, especially among tourists exploring the country.
• The increasing urbanization in various parts of Saudi Arabia, including cities such as Al-Riyadh, Dammam, and Jeddah, may create a demand for taxi services across the cities.

Strict Regulations Challenge the Market in Saudi Arabia

• People's ability to buy a personal vehicle for travel is growing due to their increasing disposable income, which could impede the expansion of taxi operations.
• Moreover, specific regulations in Saudi Arabia for the operation of taxis, such as licensing, pricing regulations, and vehicle standards, can be a challenge for taxi operators.

Saudi Arabia Taxi Operation Market Analysis

Booking Mode Insights

• The online category will hold the larger market share, of 85%, in 2024, and it is expected to become the faster-growing category in the forecast period. This is due to the rise in the number of online cabs booking service providers in the country. Companies such as Careem and Uber are making a significant presence in Saudi Arabia by offering convenience and safety to their customers.
• These services are becoming popular in the country due to their ease of use, real-time tracking functionality, and reliability.
• Real-time tracking in taxis enables customers and drivers to communicate transparently by calculating the time and distance.
• However, offline taxi bookings are still in existence, particularly in places where internet services might not be as convenient or widely used.

The booking modes covered in the report include:

• Online (Larger and Faster-Growing Category)
• Offline

Vehicle Insights

• Budget vehicles will account for the larger share, in 2024, and it is the faster- growing, with a CAGR of 8.5%, in the forecast period. This is because most of the taxis plying in the kingdom are standard sedan models, which fall under the budget vehicle category.
• Luxury vehicles also hold a significant share of the market due to the growing number of premium users or tourists. However, the majority of taxis in the country are of the economy class, which consumers select for their affordability and ability to meet the demand for regular travel.

The vehicles included in the report are:

• Budget (Larger and Faster-Growing Category)
• Luxury

Service Insights

• Ride-hailing will hold the larger market share, of 70%, in 2024, and it is expected to grow at a higher CAGR, in the forecast period. The rise in the overall cost of car ownership and the requirement to lessen traffic jams because of environmental concerns are the reasons behind it. Therefore, ride-hailing services are encouraged by government legislation.

The services covered in the report are:

• Ride Hailing (Larger and Faster-Growing Category)
• Ride Sharing

Geographical Analysis

Al-Riyadh Is Largest Province

• Al-Riyadh is the largest province in the market in 2024, and it is expected to grow with a CAGR, of 8.6%, in 2024−2030. It is because of the popularity of online taxi booking services in this province, such as Careem and Uber. These apps offer competitive pricing, convenience, and a better user experience compared to conventional taxi services. Customers can book a taxi anytime, from anywhere, by simply using their smartphones.
• Makkah is the fastest-growing province in the taxi operation market. This is due to the increasing number of visitors every year. It was reported that 13.5 million overseas visitors came to Saudi Arabia in 2023, which is expected to grow in the future.

The provinces analyzed for this report include:

• Al-Riyadh (Largest Province)
• Makkah (Fastest-Growing Province)
• Al-Madinah
• Al-Qaseem
• Eastern Region
• Aseer
• Tabouk
• Hayel
• Northern Border
• Jazan
• Najran
• Al-Baha
• Al-Jouf

Saudi Arabia Taxi Operation Market Share

The Saudi Arabian taxi operation market is fragmented due to the presence of several players. The companies are recruiting qualified and experienced drivers to increase consumer trust. They are also providing different payment methods for consumer compliance. In order to expand their availability and market reach, businesses are also offering part-time job services to customers by using their vehicles as part-time taxi services.