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Careem: The start-up ride-hailing app beating Uber

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Careem’s CEO Mudassir Sheikha is ensuring the company stays ahead of the competition by empowering his 90,000 drivers. So is this how he has created a $1bn company in just five years?

Mudassir Sheikha is part of a new style of CEO making waves in the Middle East. As co-founder of ride-hailing business Careem, the Stanford-educated entrepreneur puts a social mission – to simplify and improve the lives of people in the region – at the heart of his business.

Key to this is Careem’s own people. Every employee, whether a driver (called a captain), call centre operator or developer, receives shares in the business. Captains are given health insurance, secondments to other departments, and even informal internships for their children. The name of the business represents this aim, being a play on the Arabic world ‘kareem’, which means ‘generous’.

“Fundamental to our business is the need to make our captains’ lives better. Most of them come from Pakistan – where I’m from – and their lives in Dubai are challenging. They work 15-hour days, share rooms in multiple shifts and 90% of their money goes back home to feed their families,” says Sheikha.

“Not only are their lives challenging from a financial aspect, they don’t get much respect in society. This is why we started calling them captains instead of drivers. We want them to be aware of the importance of their role, just like the captain of a plane or a ship. It’s important for business and for our mission,” he adds.

The business side is going well for Careem. Created by Sheikha and co-founder Magnus Olsson  in 2012, the ride-booking service has more than 4 million registered users and 90,000 captains across 47 cities. In December 2016, state-owned Saudi Telecom Company announced it was purchasing a 10% stake in Careem for $100m – valuing the organisation at $1bn.

 

Careem faces strong competition across the Middle East and North Africa from one of the world’s most recognisable brands, Uber, which launched in Dubai and Abu Dhabi in 2013 and is now challenging Careem’s dominance in the Middle Eastern market. The competition has occasionally turned nasty, with Uber previously accused of ‘poaching’ Careem drivers by booking rides with captains in an attempt to get them to switch companies.

Careem co-founder Olsson called the tactic “aggressive but fair game”, pointing out that the increased competition could only benefit customers. So is Sheikha worried by the financial clout of his rival?

“We’re close to the region. We understand the needs of people here and we can solve problems quickly. Others might prioritise a problem in New York or San Francisco over Cairo, but not us. That’s a big reason we’ve been able to compete without the same level of funding,” he says.

This dedication to regional problem solving, combined with technological innovation, means Careem has often been able to stay one step ahead of its competitors. For example, Careem allowed prescheduled ride bookings from its very beginning, with Uber only introducing the feature in 2016. It also opened a call centre to allow less tech-savvy customers to make bookings without need of an app, and for captains to get directions.

“Cultural sensibilities are important. If you spend time in the Middle East, you’ll know that we don’t have precise maps and a lot of driving happens by landmarks. Much of the time, captains will need support to reach the customer and they can use the call centre for help.

“Also, many female customers don’t want their phone numbers being shared with captains. So, any pre-pick up communication is done through the call centre and we don’t give customer numbers to captains, whereas our competition does share numbers. These things might seem small, but they make a big difference,” insists Sheikha.

Leading in entrepreneurship

As with all tech start-ups, development happens at a frightening pace and can be difficult to control. Introducing the option for customers to pay in cash required the introduction of an entire department and structure, says Sheikha, but he is keen to press on with technological advances and has recently inked a deal with a US start-up to develop the region’s first self-driving electric pods.

For the entrepreneur, the aspiration to innovate is a key component of leadership. “When people congratulate us on our achievements, we need to remind them that we’ve not succeeded yet. We may have hit a milestone, but there is much more to do if we want to become an institution that remains for decades to come.”

Careem’s drive and commitment to its people clearly comes from its leadership. In 2011, Sheikha was working at a consultancy firm in the region, tasked with exploring opportunities in his home nation of Pakistan.

Asked to find billion-dollar organisations, he made a depressing discovery: “Shockingly and embarrassingly, there was only one. A nation of 200 million people only had one billion-dollar business. In San Francisco, it feels like there are billion-dollar businesses every 100 metres. I wanted us to do better,” he smiles.

At the same time, his consultancy colleague and future Careem co-founder Olsson was recovering from brain surgery, having been diagnosed with a tumour. This life-changing experience, coupled with Sheikha’s desire to build something with a lasting legacy, led to the founding of Careem.

“We wanted to build something big but the main element for us was to make people’s lives better,” he explains. While the road from foundation to a billion-dollar valuation has been full of challenges – both Sheikha and Olsson have admitted to driving passengers themselves in the early days – their focus on developing talent in the region has been unwavering.
 

Caring ethos

However, unless the rest of the region begins to take on this caring ethos, Sheikha fears that the Middle East will never catch up with the likes of Silicon Valley in the US.

“This region has drained talent to other parts of the world in the past, but the emergence of places like Dubai has meant talent has started to come back.

“Many more businesses will come out of this region, but we need to change the way we work, treat our colleagues better and motivate them more. If we don’t people will come here, get burned, and go back.”

Karam Filfilan

By Karam Filfilan

Changeboard

Karam is Changeboard Middle East's editor and UK deputy editor.

Changeboard

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