Careem Networks FZ LLC, a Dubai-based ride-sharing company may be testing its first bus-booking services in Egypt before spreading out to 14 other countries in the Middle-East and Africa. According to Bloomberg, Careem bus services will initially go live in at least four Egyptian cities, before rolling out in other countries in North Africa and the Middle East.
Careem’s plan to stem the influence of Uber and local competition in Egypt has been a driving factor for the launch of its Bus-Services; a division aimed at attracting low-income earners. The transportation company which began operations in the Middle East currently operates in three African countries – Egypt, Sudan and Morocco, and was founded in 2012 by Mudassir Sheikha and Magnus Olsson.
According to reports, the ride-hailing company will infuse a huge amount of money which remains undisclosed into the project. Also, the recent uproar caused by angry local taxi drivers alongside Uber penetration into the North African country has seen Careem imbue fresh cash into new areas to survive the roller coaster.
Careem’s foresight in the bus booking services became obvious in 2017 when the company announced that it would be investing US$500,000 in Swvl, an Egyptian homegrown bus transportation startup founded by a former staff of the company. Swvl, unlike the other transportation companies, is not an on-demand ride-sharing company. It involves customers sharing a ride in a van or bus using a high-end technology which the company provides.
The rapid increase in ride-sharing companies across the world has revamped transportation in major cities. However, much attention has not been given to bus services despite the infusion of technology to address one of the major crises bequeathing cities in Africa. As a homegrown ride-sharing service in Dubai, adoption of local expertise in the mode of operation has given it an edge.
Although the model of the proposed bus-booking service remains largely unknown, many have argued that it takes will take a striking semblance with the Swvl model. It will enable riders heading in the same direction during peak commuting hours in Egypt to share a ride on a bus using its existing app. Through the use of the app, commuters (majorly low-income earners) who ply major routes with public transports can simply enter their exact pick-up and drop-off location to reserve a spot, and can also track bus location on the app.
“There is so much room to keep growing the market that it really doesn’t make any sense to fight over the small share,” Sheikha told CNBC in an interview.
Two steps forward
Healthy competition has strengthened the company since it started operations in the Middle East. It is fast becoming the local favourite ride-sharing service which apparently gave it a boost to journey into the African market. Since its foray into the North African country -Egypt, Careem has been inundated in a heated battle with Uber over the control of the local market, thereby pushing the company to take on a new challenge.
Careem took a bold step in 2017 investing millions of dollars in the recently launched Box delivery service. This places Careem in a bout with new two-wheeled rivals such as fetchr.us as well as old four-wheeled vehicles like Uber.
“Expanding its offering beyond rides to tap into the region’s $15bn food delivery business, creating more affordable rides with tuk-tuks and bikes, as well as allowing regional start-ups to use its payment system and geographic reach will be the focus for growth,” Sheikha told journalist after launching its food delivery services in May.
No doubt, the success of the bus service in North Africa will obviously be a face-lift for public transport in Africa. It could also lead to the disruption of bus services in Africa with the infusion of Careem’s personalized mapping system will aid the easy location of drivers and riders.
