Careem, Uber Technologies Inc.'s largest rival in the Middle East, is one of the most visible technology companies in a region drawing growing interest from investors
Jerusalem/Dubai: Once upon a time, building new roads was the most logical way to improve transportation. Now, making the most efficient use of roads is even more important, according to the chief executive officer of ride-hailing company Careem Inc.
“We believe ride hailing, or a version of it, is the best way to build public transport today," Mudassir Sheikha said in an interview in Dubai, where Careem is based. There’s a Middle Eastern city “that’s building a metro bus system for $700 million dollars that will transport 200,000 people. If they invested the same amount in ride-hailing, it would have capacity for 1.5 million people and create 100,000 jobs."
Careem, Uber Technologies Inc.’s largest rival in the Middle East, is one of the most visible technology companies in a region drawing growing interest from investors. According to Magnitt, an online data platform for the technology ecosystem in the Middle East and North Africa, 2017 is on track to be a record year for funding, with the number of deals and the amount of startup investment increasing. Careem is the region’s only unicorn company, counting Rakuten Inc., Kingdom Holding Co., China’s Didi Chuxing and Daimler AG among its investors.
Money also is going into transportation infrastructure. Contracts for road, bridge and tunnel projects in Gulf Cooperation Council countries are forecast to rise to $15.5 billion next year, from $14 billion this year, construction project tracker Ventures Onsite said in a July report.
As GCC countries diversify their economies and their populations grow, “investment in the transportation sector is likely to be a top priority," the report said. “The wealth of existing and emerging new intelligent-transport systems technologies can significantly help facilitate this process."
Sheikha said technology, matched with self-driving vehicles, could be an alternative to new public transport systems.
“Autonomous vehicles are on the horizon. We’re looking at it and have partnered with a company out of the Bay Area making self-driving electric pods," Sheikha said, referring to Next Future Transportation Inc. The idea is to build eight-seat pods that could collect people from urban areas, join together to form a single vehicle on major highways, then divide up again to drop passengers at locations like malls or the business district.
Investments in infrastructure and ride-hailing don’t have to be mutually exclusive, said Philip Bahoshy, Magnitt’s founder.
“The MENA region at large continues to develop its infrastructure, which will complement access to cars, the tracking of locations and interconnectivity, within states and across states," he said. At the same time, he said, “ride hailing in its essence creates efficiency."
Careem currently offers services in the UAE, Pakistan, Saudi Arabia, Egypt and other areas. Bloomberg