Government officials confirmed on Monday that one of the biggest challenges in the taxi sector is achieving Saudization. Saeed Al-Bassami, chairman of the Transportation Committee in Jeddah’s Chamber of Commerce, explained to Arab News the need to increase competition in the sector, which carries about 75 percent of the passengers inside Saudi cities.

According to Al-Bassami, the merger between the companies to form large entities would limit the competitive capabilities of these firms and the desire to expand to keep up with the demand.

Like any other market, the taxi market in the region is for the strongest and the most capable of competition, the official pointed out. Many companies left the market recently, after they were unable to meet operating requirements, the renewal of the fleet or the use of good cadres in leadership.

When asked about the lack of preference for a merger between taxi companies, Al-Bassami replied that the merger would decrease motivation to expand the sector.

“It will reduce the power of self-motivation for small businesses to innovate and grow in the market. The Saudi taxi sector needs to be widespread to cover all parts of the Kingdom, and the increased demand for service is greater because of the reliability of the performance and promptness in meeting demands compared to public transportation, which is achieved by staying relatively small,” he said, adding that mergers could make this edge disappear.

Regarding growth rates in the sector, the market is expanding at a 6 to 8 percent growth rate. “There is a need to fund new investments of up to a billion riyals as a first stage, to keep up with the demand. I’m expecting very positive effects in the future until the start of public transportation projects,” the official explained.

Despite future transportation projects lined up by the government, the official stressed that there will still be a need for taxis, since some citizens have difficulty to access public transportation, particularly the various neighborhoods located in remote areas.

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