2 Oct 17

A company car for your female Saudi employees?

Last week, the Saudi government announced that women would be allowed to drive a car starting in the summer of 2018. Some would reckon this is a move to improve the Muslim country’s image to the outside world – a move supported by the royal family, who is conscious of the fact that modernisation is at place.

Women have long been disadvantaged in Saudi society, and perhaps now the time has come for them to claim their position, for starters behind the wheel of a car – something that today is still illegal and can lead to incarceration.

Other analysts believe it is a way to cope with the economic outlook that Saudi Arabia is facing. Oil prices continue to be low and the country needs to diversify to lessen its dependence on it. That means women need to participate in the economy, something that is only possible if they are mobile.

Obstacles down the road

A logical consequence of women starting to drive, is that they need to get a driver’s licence. That is going to be a huge challenge, not because of the difficulty of the lessons and the exam, but because there are – logically – no women driving instructors in Saudi Arabia. Due to the strict separation of sexes, it is inconceivable that a woman would get lessons from a man.

Unless, of course, this man is her own husband, father or guardian. The authorisation to drive a car will depend on their goodwill in any case – every important decision requires the consultancy and consent of a man. Another possibility would be the ‘import’ of female instructors from neighbouring Muslim countries where women are allowed to drive.

The impacts on the industry

Today, women that go out to work have to rely on taxi services to commute. A large part of their wages is spent on this expensive way of getting around. When women eventually start roaming the streets of Riyad themselves, the taxi business might very well lose business.

On the other hand, women could cause a boost in car sales and all related services as they purchase their own car – or have it purchased for them. Think about tyres, maintenance and repair, fuel, insurance, car wash, and even parking facilities. Also, this could mean that more employees are entitled to a company car, bolstering fleet sales and the leasing business.

The Saudi car and LCV market, which is dominated by Toyota, Hyundai and Ford, has been shrinking dramatically since 2016 after a five-year rise, mostly due to austerity measures and probably the Qatar embargo. From 830,000 units in 2015, sales dropped to 656,000 last year. Women behind the wheel could give the market the boost it needs, but the effect is unlikely to be felt before 2018.  

Finally, to save costs, it might not be unthinkable that Saudi women are willing to share their car with other women, perhaps limiting the increase in new car sales – but giving rise to a plethora of ride sharing apps. But such apps and sharing cars with others require an even greater freedom for women – and will therefore probably take years to materialise.


Authored by: Dieter Quartier