The taxi fleet in Ras Al Khaimah has been reduced by 200 vehicles following the withdrawal of Cars Taxi, whose four-year contract ended one week ago.
"RAK business is good and RAK Transport Authority were extremely good and extremely cooperative with people there, but as far as our budget is concerned, we need to limit certain things," said Abdul Razak Mohammed, the deputy general manager for Cars Taxi Service. "It is a mutual agreement."
Some Cars drivers have transferred to Al Arabia Taxi, which will increase its fleet to 500 from 450. Al Hamra Taxi Company, which had been run by Cars, will fall under new management and will have 200 cars.
The actions will reduce the number of taxis in RAK to 700 from 900. The remaining Cars fleet will be distributed among other emirates.
With a smaller fleet in RAK, drivers are making more money.
For Mohammed Abdul, 32, a driver from Bangladesh, this means he gets to sleep two extra hours a night and earn Dh4,000 a month.
Previously, he worked 18 hours and slept for about four hours.
"Before there were many cars so it was a problem," he said. "Ten hours' work is still not enough to eat. I have to work much more than this, at least 14, 15 hours."
A driver care committee was created in May and has helped drivers with fines and ensured that drivers receive emergency leave.
"We are getting more business and the conditions are different now," said M, 50, a former Cars driver from Bangladesh who recently transferred to Al Arabia.
He praised his new company for its respectful management.
"Now I think for myself that Arabia Taxi is better," he said. "They use good language with the drivers, not bad language."
Last year, M earned only Dh725 between January and mid-March because his car was confiscated while he did unpaid training on several occasions. This year, he has already earned Dh698.
Since the introduction of modern taxis in 2008, RAK drivers have struggled to compete for scarce customers and most worked more than 16 hours, earning between Dh1,500 and Dh3,000 a month.
"During that time, the population in RAK was growing tremendously and we thought we should reach the maximum of 1,200 taxis as a whole," said Jason Farhat, the director of commercial and investment affairs for the RAK Transport Authority (Rakta).
The number of taxis peaked at 1,100 last year and supply greatly outstripped demand.
In hindsight, Mr Farhat said: "Over-expanding was not the right option."
On Tuesday, Rakta formalised its bus service between Dubai and RAK. The route has served 7,000 passengers, up from 4,000 since service began in July.
Previously, Dubai-RAK passengers were crammed into small buses that did not have working seat belts.
Plans to expand the RAK bus terminal are on hold. The existing terminal, which seats 14 passengers, inside and out, will soon be renovated to include a cafeteria, and air-conditioned sections for men and women.
Rakta said it is in the "final stages" of starting internal routes on 14-seater buses to rural areas of the emirate. The implementation of the service has been delayed six times. Rakta said routes from Nakheel to the north-coast town of Al Sha'am will be available by April or May.
"We had to restructure a lot of things," Mr Farhat said.
He pledged that Rakta would meet the public demand for internal buses by spring, despite repeated delays.