Car rental company U Drive has been forced to suspend its service allowing users to pay based on their per-minute usage.
The service was launched via the company’s mobile application earlier this month. It allowed users to find a rental car within the nearby area and pay for it at a rate of Dhs 0.50 per minute, capped at Dhs 120 per day.
However, the firm announced over the weekend that it had been forced to put the rental option on hold due to regulatory issues.
“We would like to inform you that at the time being, U Drive can offer car-rental service on a daily basis only, the previously offered service per-minute car rental scheme is currently put on hold until certain logistical, regulatory, and administrative issues are resolved,” the company said.
U Drive, which was founded in Dubai in 2014, said it was working very closely with the Roads and Transport Authority to offer the service in a way that is compatible with rules and regulations governing car rentals in the emirate.
“We are sorry for any inconvenience this might have caused. For customers who have registered with us, we will be refunding your membership fees should you wish,” the company added.
U drive launched the per-minute service with a 30-vehicle fleet of Toyota Yaris models and had plans to increase the number to 150.
Initial bookings could only be made in Dubai, but the company planned to expand to Abu Dhabi and Sharjah/northern Emirates, followed by Oman.
The company's per day rental rate appears to have been lowered to Dhs 99 in response to the incident.
By Robert Anderson
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