Uber and Careem face a driver shortage in Saudi Arabia, largely due to laws letting only Saudis work for the companies and mandating that drivers own their cars
Samer Al-Atrush / Financial Times :
Context & Ripple Effects
Saudi Arabia is simultaneously one of Uber's most important markets and one of its most entangled: the kingdom holds a reported 10%+ stake in Uber itself, while state-owned Saudi Telecom bought a 10% stake in Careem for $100M back in 2016, before the two platforms began preliminary talks to combine their Middle East operations. The market was big enough that Uber prepared product changes around the country's 2018 legalization of female drivers, when its Saudi operation was already seeing 1.33M riders quarterly.
The new FT reporting adds a structural constraint on top of that history: local laws restrict driving work to Saudis and require drivers to own their cars, which caps the recruitable workforce at a narrow slice of the population. It compounds an existing pattern of friction with Riyadh, where the pair already faced a combined tax bill of around $100M over a VAT calculation dispute.
First-order effects
- Uber and Careem have a smaller driver pool exactly where they have their deepest strategic ties, forcing recruitment to focus on Saudi nationals who own vehicles rather than the expatriate workforce that typically staffs Gulf ride-hailing.
- Riders in a 1.33M-quarterly-rider market face thinner supply and likely longer waits or surge pricing as the platforms compete for the same limited cohort of eligible car-owning Saudi drivers.
Second-order effects
- The car-ownership requirement effectively turns every recruit into a capital commitment, pushing Uber and Careem toward vehicle financing, leasing, or subsidy arrangements to lower the entry barrier for Saudi drivers.
- With the kingdom as both regulator and shareholder, Uber has leverage few operators enjoy: its 10%+ state ownership gives it a channel to press for rules that ease the very shortage those rules create.
Third-order effects
- If Saudization-style labor restrictions keep binding platform work, the Gulf becomes a test case for whether ride-hailing economics survive when the flexible migrant-labor model that made the category viable is legislated away.
- The shareholder-regulator overlap points to a broader structure where sovereign wealth positions shape domestic platform policy — market access increasingly negotiated through equity stakes rather than pure regulation.
The trend: Gulf ride-hailing is being reshaped by national employment policies even as the states themselves become shareholders in the platforms they regulate.