Car service Careem expands to Doha, Riyadh, discusses Uber

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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That nickname may soon be outdated, as we’ve heard rumors that the next custom car service to enter the Dubai market will be Uber itself (if they can get organized with local transport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. 

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