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On-Demand UAE Startups And SMEs Are In The Right Place At The Right Time

On-Demand UAE Startups And SMEs Are In The Right Place At The Right Time
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You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

The on-demand industry works on the basis of companies fulfilling consumer demand via the immediate provisioning of goods and services. Some of the most prominent examples of on-demand companies include Uber, Lyft, Caviar, and Homejoy. This sector’s growth in the Western world has been aided with the booming of the freelance model over the last decade, with an ever-increasing number of people choosing to freelance, rather than engage in a permanent and structured work arrangement with an employer. Some work a combination of different part-time jobs or are students or are primarily homemakers (both men and women) “jobbing” on the side. In the Middle East, startups like Nabbesh have made it a lot easier for companies in the region looking to engage with freelance talent for independent services.

Some of Silicon Valley’s insiders are already announcing a new world order, where the old principals of economics are replaced by a kind of digital feudalism. Indeed, the world has changed as capital, once scarce, has become (almost) abundant, and quality human capital is being feverishly sought after. In the West, many of the individuals driving limousines, cleaning apartments, and delivering food do these activities as ways to generate income on the side. They are students, individuals who have full-time or part-time jobs, or seasonal workers on downtime. By having a “fixed” job (which usually covers insurance and social benefits), they are free to participate in the on-demand economy on an on-demand basis. This provides an easy way to earn some extra cash, and is also helping to make the economy more efficient. An added benefit is that it contributes to making many on-demand services affordable for the middle class.

In the Middle East and specifically in the UAE, we have also seen several of these on-demand technology companies spring up. Careem, WashMen, GetLaundry, and ChefXChange are a few examples. Careem is a private car booking service similar to Uber, but the company’s “Later” feature also allows users to pre-book rides. With WashMen and GetLaundry, you can request immediate or schedule pick-up and delivery of your laundry via app or website. With ChefXChange, you can book your private chef to prepare a meal in your kitchen and while your dinner is being cooked. There are also several providers of house cleaning either on demand or on a schedule basis, as well as a plethora of food delivery services in the Emirates.

However, the situation in the Emirates with respect to freelancing is not as easy as in other countries. Most on-demand service providers are expats; hence, there is the need for a visa, a visa sponsor, an employment contract, etc. The UAE visa and business operation system is not set up to easily enable individuals to be in a job that sponsors your visa, and then to spend some hours on the weekend cleaning apartments on-demand, cooking at a BBQ for a fee, or to drive around a tourist in your personal car. Fortunately, labor is relatively affordable here, so it is still possible to run on-demand services at a reasonable cost, while “developed” countries are currently struggling to adapt to changes in the labor market driven by part-timing, freelancing, and on-demand companies, as Western employment law has not kept up with the evolution of non-permanent service jobs.

At first glance, it may appear that the UAE is ill prepared for hosting freelance and on-demand workers in the Emirates. But is this true? In the UAE, one needs a trade license to engage into a business activity, and it must be in line with the business activity being offered. Hence, freelancing is absolutely possible, provided you have a valid trade license for your business sector. The same applies to part-time and on-demand work, but a person is restricted from working in any other business sector that is not covered by their trade license. For example, if you are an independent IT consultant with a valid trade license, you aren’t allowed to drive limousines or cook for other people and charge for your services. Then again, this is not that different from many other counties that host freelancers and on-demand services. So while part-time work still poses a challenge to the on-demand industry, full-time freelancing and full-time employment in on-demand companies is very possible. These factors are all helping to make the UAE well situated to continue to grow the on-demand service market, and promise great things for startups and SMEs operating in that growing sector.