More than 20 percent of the 700 car rental businesses in Jeddah do not have licenses to operate on the city's roads, an official from the Jeddah Chamber of Commerce and Industry (JCCI) said.

Said Al-Bassami, chairman of the JCCI's Car Rental Committee, said some of these illegal operators run their businesses from residential apartments or auto mechanic workshops. "The owner of the workshop may be a foreigner who owns a number of used cars, sometimes more than 10," he said.

"He buys the cars at an auction or second hand market, then leases them to his fellow nationals at rock bottom prices, in violation of the price list issued by the ministries of commerce and transport."

"They have their own methods of hiding and evading (the law). They use special signs when they see inspectors heading their way. And they leave the location in no time, only to come back later when the inspectors leave, to carry on business as usual."

"There are more than 700 car rental firms in Jeddah, of which 90 have been shut down over the past two months. There is a committee made up of representatives from the Ministry of Transport, Passport Department, Jeddah Police and the Mayoralty of Jeddah that conducts spot inspections from time to time," Al-Bassami said.

"Licensed car rental businesses are suffering, because some people do not return the cars on time, or leave them on the outskirts of the city. Some people simply disappear and do not pay the rental companies. Cases like these rob firms of 25 percent of their revenues, not to mention the high insurance rates on the cars," he added.

Meanwhile, a committee this week raided eight car rental offices in Prince Majid Street, fined each SR 5,000 and shut them down.