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The Company is a luxury transportation provider in Dubai exclusively serving large hotels. The Company was founded in June 2007 by its general manager/ owner; in September 2007, the Company secured its cars in September with 20% down and 80% from a 3 year 5% bank loan. The luxury transport license requires majority ownership by the local sponsor. The local sponsor receives 30,000 dirhams a year.
Visas and certification costs approximately 10,000 AED per driver plus a 2500 AED refundable deposit. RTA number fees (for plates) are 6300 AED per car per year plus a 2500 AED refundable deposit. A new licensing system is being implemented whereby a limited number of plates will be auctioned. By limiting the supply of vehicles, the cost for new cars is likely to increase along with the value of existing licenses.
Currently the Company is able to use Lexus ES 350’s. However, new licensees will have to purchase Lexus ES 460’s, at an extra cost in excess of AED 40,000 per car. Customers do not pay higher fares to compensate for this extra cost, providing the Company a cost advantage.
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