Car service Careem expands to Doha, Riyadh, discusses Uber
UPDATE: After hinting that this would be the case, Careem is also
now live in Riyadh. Its initial fleet consists of SUVs, and its
pricing, the founders say, is lower than the cost of a sedan trip
in Dubai. A trip from Riyadh Airport to Kingdom Center would
costs an estimated SAR 160 (US $43).
Car service Careem, which we
dubbed the “Uber
of the Middle East,” is now launching in Doha, after operating
in Dubai since February.
That nickname may soon be outdated, as we’ve heard rumors that the
next custom car service to enter the Dubai market will be Uber
itself (if they can get organized with local transport authorities
in Dubai and Abu Dhabi, to avoid the
controversies that rocked it in other markets).
While Careem soft-launched their service in Doha this summer,
they’re now officially announcing the roll-out; the first in a
market outside Dubai (those who sign up get 50 QAR off).
So why Doha and not Riyadh? Due to the prevalence of cabs in Dubai,
it's likely that Riyadh is a more lucrative market, with a healthy
need for reliable transportation. During our recent Mix N’ Mentor
event in Riyadh, getting home at night without taking a local taxi
ended up costing $50 in a hotel taxi; a company with a transparent
cost structure would have been a far better option.
Doha, say Careem's founders, simply made sense as an initial test
market. “There are a lot of things that need to be put in place, on
an operational and technological front, so that we can get our
platform ready to operate in a distant market,” says founder and
managing director Mudassir Sheikha. “Once those are in place, we
can get ready to work in a more complex market like Saudi.”
Customer pain points in Doha, where taxis are not typically
available on the streets, more closely resemble those in Riyadh
than those in Dubai, says Riad Abou Jaoude, a Wharton student who
has been running Careem’s Doha operations (as he returns to school
in a few weeks, the company is looking to hire someone to take his
place).
Yet Qatar is "not just a stepping stone,” says Sheikha; the company
is hoping to capitalize on the increase in traffic to Doha as it
ramps up to the 2022 World Cup.
Expansion into Riyadh is not far off, however. Once the company
launches in Riyadh, it will target three markets: business
travelers, women, and religious tourists.
Due to the laws against women driving, women are a particularly
large target segment. “Some of the limo companies that we spoke to
told us that 90% of their customers are women,” Sheikha reveals.
(Some of the women at our recent
Wamda for Women roundtables in Riyadh agreed that ‘Driving is
THE issue’ when it came to workplace challenges).
Uber is also heading for the lower hanging fruit in Dubai before
tackling Saudi. When it comes to Uber’s entrance into the Middle
East, Careem is “actually very excited,” says Sheikha.
“We think it will be great to get a world class player in the
market. It has not been easy, educating the drivers to work in a
market like this, getting the limo companies on board, and
educating customers on what we do; we're excited that another
player will start educating the market as well.”
Competing “will force us to sharpen our execution,” he says. The
company will also be sticking to its values. “Careem was founded on
the premise that we would impact people's lives in a positive way,”
says Sheikha. For Ramadan, Careem is offering customers a 20%
discount on rides from 4 to 6pm, as they are heading home to
iftar.