x Abu Dhabi, UAESunday 23 July 2017

Failed car rental firm boss has left country

Entrepreneur behind low-cost vehicle hire business defends the budget initiative and says he fled the UAE in fear of legal system.

One Rent Car's business model was to offer hire rates that became lower the farther its vehicles were driven while advertisers would have their messages displayed on roads around the country.
One Rent Car's business model was to offer hire rates that became lower the farther its vehicles were driven while advertisers would have their messages displayed on roads around the country.

Abu Dhabi // The entrepreneur behind a collapsed car rental company that promised vehicles for as little as one dirham a day says he fled the country out of fear of the legal system. Hakim Gouasmia planned to rent out cars covered with advertising. The low rental price was meant to draw in customers who would then spread the advertiser's message as they drove through the country's streets.

The farther the customer drove, the lower the price - giving drivers an incentive to spread the sponsors' messages more widely. The more exposure, the theory went, the happier One Rent Car's clients would be. However, all did not go according to plan, and the company collapsed this month. Since then, a flood of former advertising customers have gone to the authorities in Sharjah, where One Rent Car was based, to complain that they had not had their deposits returned.

To reserve a branded vehicle, customers had to put down Dh3,000 (US$810). So far, 117 people have come forward. It is believed a total of around 500 may be in the same position. Several former clients said Mr Gouasmia had left the country by crossing the Omani border this month. From an undisclosed location, he sent an e-mail to The National, in which he said he wanted "to clarify many things".

He remained convinced that the business concept was "amazing". "So far, we had a good response from clients and brands," he wrote. "My plan was to invest for two years in the company [our own finance] and then, brands will come along. "That is actually what happened," he added. "We were doing well." Mr Gouasmia said he had a difference of opinion with his local partner, Mohamed Sharif Abdulaziz al Awadi, the general manager of a prominent bank in Dubai.

Mr Gouasmia said he invested Dh2m of his own money into the company, with Mr al Awadi putting in Dh1m. Mr al Awadi declined to comment. The initial funds were used to buy 92 Kia and Mazda vehicles. A recent bank statement shows the company's account in the red to the tune of Dh43,104.18. "I think people have the right to know where their money is," said Mr Gouasmia. Chuck E Cheese, an entertainment centre in Dubai, said last week that it had paid Dh75,000 for advertising on the vehicles, but had not received any money back after the company collapsed.

However, Mr Gouasmia said: "Chuck E Cheese paid Dh75,000 for only three months' contract. We kept their advertising for free in our cars for more than one year and today they are complaining." A spokesman for Chuck E Cheese could not be reached for further comment. This week, Mr al Awadi said Mr Gouasmia "escaped with the money". He declined to comment further, saying: "The whole thing is with the court. That is all I can say."

Mr Gouasmia denied this. "I left the UAE without any money," he said. "I guess the money is with him [Mr al Awadi] or with the police or with the broker." He said his decision to leave the UAE was sudden and not planned. He insisted he had not done anything wrong, but declined to confirm his location out of fear of being arrested and extradited to the UAE. Some of his clients have filed separate civil lawsuits against the company owner while many have abandoned their cases as costs have mounted.

Several Facebook groups were set up this month to in an effort combine actions into one criminal lawsuit against the company. A legal expert, who is not connected to the case, said: "If a criminal case is pursued and won by the clients, the police can liquidate some of the company's assets to pay back the victims." Since Mr Gouasmia's departure, One Rent Car's staff have switched off their mobile phones. They, too, are believed to have left the country out of fear of being involved in a lawsuit.

Among those who have left is the general manager, Luella Kay, an Australian. She did not reply to e-mails requesting an interview. Sharjah's public prosecution could not be reached for comment. One Rent Car's office is vacant, although the company's website is functional and still accepting reservations. @Email:myoussef@thenational.ae