Dubai-based Carasti allows customers to rent new cars for up to two years

The start-up plans to enter Saudi Arabia in the second half of the year

Carasti’s co-founders Michael Menary, left, and Claudio Esposito Aiardo, aim to expand their business to the wider GCC market. Courtesy Carasti

Dubai-based car subscription start-up Carasti launched a new service allowing customers to rent new cars for 12 and 24 months, without the financial commitment of owning a vehicle.

The rollout of the new service and expansion of the company follow the raising of $3 million in pre-Series A funding round last month that was led by Net Ventures with participation from Rua Growth Fund.

"There are no hidden costs, no extra fees and no financial surprises. We simply don't believe that you should be weighing yourself down with debts, bank loans and payments just to drive a car," Claudio Esposito Aiardo, chief executive and co-founder of Carasti, told The National.

UAE customers can subscribe through the Carasti app, where they can select a car, upload their driver’s licence and Emirates ID. The car will be delivered to their doorstep after their details are verified.

Customers only pay a monthly fee with no down payment, upfront costs or insurance charges. Carasti handles vehicle registration, maintenance and servicing costs, roadside assistance, insurance and delivery of the vehicle.

With the proliferation of ride hailing companies such as Uber and Lyft, people have greater mobility choice, particularly in urban areas. Half of car owners know today that they will no longer want to own a personal vehicle by 2025, according to KPMG's Global Automotive Executive Survey 2019. McKinsey predicts that by 2030 almost 30 per cent of the automotive industry's revenue will come from subscriptions and other shared mobility recurring revenue models.

With the launch of is new service, Carasti aims to attract more customers to its platform as it prepares to enter Saudi Arabia – the Arab world’s biggest economy – in the second half of this year. Carasti plan to enter other GCC markets next year, Mr Aiardo said.

“Our subscription model aims to make car ownership as flexible and affordable as possible … providing our customers with an easy alternative to car ownership,” Mr Aiardo said.

Founded in December 2019, Carasti works with various fleet partners in the UAE who have registered on its platform. Its minimum subscription starts from one month.

“We have seen a fast uptick in the number of our customers in the past few months. Currently, more than 2,000 cars are in use by our customers and we have another fleet of 1,000 reserved cars to meet any upsurge in demand,” Mr Aiardo said.

“We hope to provide vehicle plans that suit any lifestyle or budget without the worry,” Michael Menary, chief financial officer and co-founder of Carasti, said.

“We are confident that our new mini lease subscription service can help reshape the common conceptions of car ownership in the UAE and the wider region,” he added.

The company is offering customers who sign up during Ramadan, Dh100 of free fuel every month for an entire year through a partnership with fuel-booking app Cafu.