Saudi Arabia surprised the world with a long-overdue royal decree this week: Women would finally be granted Saudi driver’s licenses in June 2018, ending the kingdom’s infamous de facto ban on female drivers.
However, the change also needs to be considered in light of Riyadh’s ongoing attempts to reimagine the Saudi economy for a post-oil future. Suddenly allowing the entire country to drive could have a major economic effect on Saudi Arabia — and it could pay to follow the money.
For decades, the restrictions on women driving in Saudi Arabia produced an awkward sub-economy dedicated to men driving women around. Richer Saudi families generally hired full-time drivers, often migrant workers. More recently, ride-hailing apps, such as Uber (now partly owned by the Saudi state’s Public Investment Fund) and the Dubai-based Careem, began to offer cheaper alternatives.
In a country of 32 million people, this sub-economy was a fair chunk of change. According to Arab News, there are at least 800,000 men, mostly South Asian, who work as drivers for Saudi women and are paid a salary of as much as $400 a month for their services, in addition to numerous other costs. Figures released by Uber suggested that as many as 80 percent of its users in Saudi Arabia are female, while other ride-hailing apps also rely on female users.
“There are some [women] that take five to 10 trips with us every day,” Mudassir Sheikha, the founder of Careem told the Los Angeles Times in 2015. “We don’t see that kind of traffic anywhere.”
If Saudi women actually begin driving en masse, this industry will be turned on its head. Hundreds of thousands of hired drivers may be forced to look for new work or even leave the country. Though both Uber and Careem proudly offered support for female drivers after Tuesday’s royal decree, their own economic future in Saudi Arabia looks far less certain than it did a week ago.
If those who provide driving services in Saudi Arabia face uncertainty, those selling cars are understandably more hopeful. It’s not surprising that car manufacturers such as Ford and Volkswagen have released ads congratulating women on the new driving policy. Saudi women have used a hashtag on Twitter to discuss what sort of car they might want to buy.
Whether that surge in car buying will actually happen is harder to say. Wealthier families may save money by letting their driver go, but many already own a car that their female family members might use. Meanwhile, poorer families may not be able to afford a new vehicle, let alone other costs that could include driving instruction.
A lot will depend on how Saudi Arabia rolls out its new driving policy. A committee has been given 30 days to work out how to implement the royal decree. Saudi Arabia’s strict guardianship laws seem set to stay in place, a fact that could well hinder any woman who wants to drive when her male relatives forbid it.
Saudi royals have long suggested privately that they’re inclined toward allowing greater freedom for women but that conservative societal beliefs among the general population have held back reforms. There was always, however, a little bit of economy-minded realpolitik about how the no-driving rule was enforced. For example, Bedouin women have long driven without licenses, a reflection of their rural circumstances. Women were also allowed to drive in the Dahran compound of Saudi Aramco, the country’s enormous national oil company.
Some observers have pointed to Aramco’s forthcoming public offering as an economic justification for why Riyadh has chosen to allow women to drive — the reasoning being that more drivers would mean more profit for the company.
There is a major economic link between Aramco and the royal decree, but the reason is actually a little more complicated than that. Years of dwindling oil prices have led the Saudi government to rethink its future economy beyond petrodollars; hence the Aramco IPO. This big reform plan, dubbed Saudi Vision 2030 and led by 32-year-old Crown Prince Mohammed bin Salman, has made clear that Saudi Arabia’s underemployed but well-educated young women are integral to the nation’s economic future.
Mohammed has said that the government is aiming to increase female workforce participation from 22 percent to 30 percent by 2030. Lifting restrictions on driver’s licenses may be risky for Saudi royals in other ways, but it is one clear way to push the economy in the right direction.
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