Despite coming up against regulatory hurdles and protests from taxi drivers, the cofounder of Careem says his ride-hailing platform is in Jordan to stay.
By Laith Abou-Ragheb
Mudassir Sheikha, the cofounder of Careem, the Dubai-based ride-hailing platform, made a flying visit to the Kingdom last month to appear at two big tech meets: the MENA ICT Forum and Endeavour Jordan’s DealMakers.
He used the events to personally make the case for how his fast-growing company, which along with its chief rival Uber is currently encountering a push back from local regulators and taxi drivers,will ultimately prove a boon for Jordanians in terms of improving their transport system and creating many thousands of new jobs.
In this wide-ranging interview on the sidelines of the DealMakers 2016 event, Sheikha lays out just why he thinks his service is attracting so much interest, and how it now has the momentum to expand even further as part of the wider on-demand industry that’s sweeping the region.
You launched Careem in 2012. How big are you now?
We are now in 11 countries, and 43 cities. Historically we have grown about 25 to 30 percent month-on-month, which basically means that this doubles every three to four months. We have about 100,000 captains, or drivers, that work with us across the region. There are about 6 million people that are registered with us and we do hundreds of thousands of trips throughout the region on a daily basis. We are working with about 2,000 captains in Amman, which is amazing. It’s been about a year since we set up here, and we’ve seen phenomenal growth. We’re impacting the lives of over 60,000 customers on a monthly basis.
How do you explain your popularity?
This region has not built public transportation systems like those in Europe or the U.S. did hundreds of years ago. So there is a shortage of reliable transport options. I think when you come to the market and make transportation reliable and offer a consistent quality of service then there will be a demand for it. On the supply side, we all know that there is a great deal of unemployment and underemployment in the region and they are looking for ways to make their ends meet or actually start getting employed. So both on the customer side, who are looking for reliable and high quality transportation options, and from the captain side, who are just looking for a meaningful way to earn a living, there is demand.
Like other parts of the world, you’ve encountered problems with regulators in Jordan. How confident are you that these licensing issues can be sorted out?
We are a technology platform at the end of the day. We don’t own any cars, we don’t employ drivers directly; they’re basically using our platform to get business from other people that need a ride. Regulations around the region are starting to get formed. I think Saudi Arabia, Qatar and to some extent Dubai have put some regulations in place for businesses like us. From all we can tell, Jordan’s Ministry of Transport is also putting together a draft regulation that will accommodate companies like us, that will govern what types of cars we can work with and how we work with them, and which is similar to what other governments have done regionally and globally. We are, of course, trying to convince people not to limit dispatching to licensed taxi drivers, but also open it up to Jordanians that want to earn an income and may even offer a better quality of service than the current licensed people. The regulators are very supportive. They all see this as an opportunity to create jobs and [develop high-quality means of] public transport that will serve people, both on the captain and the customer side. I think sometimes vested interests, who are many times misinformed or see a hit on their business due to other reasons, start attributing that slowdown to us and start agitating. Because let’s face it, the region is going through a little bit of a slow economic cycle and business demand is a bit slower without us being in the equation.
Taxi drivers have staged protests in Jordan against Careem and Uber because they think you represent unfair competition. Do they have a point?
There’s a myth that we are taking away business from taxis. We do surveys of our customers and we found that eight or nine out of 10 customers weren’t using taxis before. We are also 40 percent more expensive than taxis in Jordan. So a lot of people that are using us were either not moving around as frequently or they were using their private cars. This is not a business that is being sucked out of the taxi system.
Having said that, we are not a transportation company per se, we are a dispatching company. So we are not averse to even adding taxis to our platform. In fact, we have offered to add taxis to our platform in Jordan, and 500 of those taxis have already registered with us. As long as they meet our quality requirements, if they don’t then we are happy to train them to meet those requirements.
Do you expect to encounter the same protracted opposition as similar ride-hailing platforms have met in Europe and the United States?
I don’t think we ever built the same sophisticated transport systems that were built in Europe and the United States. Most European cities have very mature and sufficiently staffed taxi systems. Whereas in our region, in most cities they don’t even exist in enough capacity. So there is a pent up demand that is not being served by that system. In Europe, when you launch a service like this, you’re actually disrupting the existing taxi system. But when you launch a service like this in the Middle East, the majority of the business is not disrupting anything. It’s really expanding the size of the market.
What other challenges are you facing?
The challenges that you face building a business like Careem are primarily two-fold. One is fundraising. For local startups, it tends to be a little challenging. The second is talent. You need strong local talent to come and build these types of businesses and we’re competing with world-class companies that have access to global talent. Both of these are getting better.
There are a lot more funds now for startups than there were let’s say three years ago. On the talent side, at least Dubai has created a value proposition for global talent. When I call someone in New York, London, or San Francisco trying to recruit them to the Middle East, they don’t hang up the phone.
What about the future of Careem?
The opportunities are way bigger than we realized at first. It’s not a taxi dispatching business, it’s a mobility business. Our objective is that every trip that you take will be through our platform in some shape or form. Even if it’s your private car, we want to be making it easier to use. If it’s a taxi, bus, or train, we want to be part of every trip that you take. And there are many trips happening in the region. We need to make it more accessible. Some people may not be comfortable using apps. So we may need to come up with other ways for them to use the service. We also need to make it more affordable. There are people who cannot afford these services in the way they’re priced at the moment. We’ve got about 100,000 captains. We try to grow about between 20 and 30 percent month-on-month. The focus is on building the existing markets and growing our penetration there and then in many countries we’re still not present in some of the smaller cities. It’s another priority to open up in second-tier cities.
How do you see the whole on-demand sector developing in the region?
I do believe that over time we will start to get a lot more things on demand than we do today. But it seems like the economics for a lot of those ideas don’t make sense. But over time, and maybe in some other markets before others, these things will start to become economically feasible and will start showing up. If it hasn’t worked in the United States, it doesn’t mean that it can’t work in Jordan. The economics are different. The labor costs are different. The fuel costs are different. I believe in on-demand. It has more potential in our markets than it might have in the West. So we’ll probably see them earlier here. But we need entrepreneurs to step up and rise to the challenge and start developing these things.