Is Ousta Egypt's fastest growing startup ever? [Q&A]
[Update July 27: five months after launching Ousta is negotiating a $5.6 million investment round.]
Ride hailing app Ousta may be Egypt’s fastest-scaling startup to date: it launched in March and already operates in 10 cities in Egypt - more than Careem and Uber - and has plans to expand offshore in July.
The company’s rapid growth comes from an in-depth understanding of what Egyptians want and of the hyper-local quirks of their society, say cofounders and long time friends Nader El Batrawi and Omar Salah.
El Batrawi, founder of professional network Jobzella, and former Nestle Waters manager Salah launched Ousta promising no price surging, 50 cent rides and a live fare meter allowing sceptical passengers to track their fare during a trip.
In just four months Ousta, Turkish and Egyptian slang for ‘masterful driver’, has been downloaded about 100,000 times and operates in Greater Cairo (Cairo and Giza), the Delta cities Alexandria, Ismailia, Suez, Mansoura, Tanta, El Mahalla El Kobra, Zagazig, and the Red Sea town of Hurghada (we hear the entire North Coast will also be covered by the end of June).
The startup is self-funded but the cofounders hope to close a deal with investors soon. They spoke to Wamda about the S.O.S. button, 50 cent rides, and the Ousta ‘SWAT’ team.
Wamda: How did Ousta grow so fast?
Omar Salah: We are focused on Egypt but the majority of our operations team is focused on entering smaller cities and there is a methodology to this. For starters, smaller cities are untapped markets with poor transportation yet the population is quite educated in the use of smartphones and is yearning for proper reliable transportation options.
Nader El Batrawi: We have over 3,000 cars on the road now. So by the end of 2016 we hope to enter more cities and governorates and potentially have 10,000 cars on the road. We sometimes train drivers in the morning to see them fully using the application and taking rides by the end of the day.
Wamda: What sets Ousta apart from that competition?
El Batrawi: The local edge is essential in a business like this one. We have all used Egyptian transportation, we know Egyptian traffic like the back of our hands and we can tell what the consumer needs and we provide it. Hence, we offer no price surge and have the lowest fares out there, because we understand the economic strain Egypt is under.
Salah: We have, for example, created a more affordable line called the ‘Super Saver’, and in some cities the trip fare is just 5 Egyptian pounds (US$0.56). We managed to do that by including what other competitors might call ‘less famous car brands’ but all are new and air conditioned vehicles. And for those who are looking for bigger or more luxurious vehicles, we have the ‘economy car’ option.
Wamda: What option is most popular?
Salah: The Super Saver is proving to be a huge success with our users as it is more cost and budget friendly with the same ride quality as any other car.
Wamda: How many users do you have?
El Batrawi: It is going pretty well, the app is downloaded once every minute and there is a new ride request on the application almost every minute too. We are currently adding more cars because of the high demand we face everyday.
Wamda: How do you find drivers?
Salah: While we would have loved to open our doors for individual drivers to apply, we cannot do so legally and it must be done via private car companies which in turn take over recruitment, papers and so on for each driver. But we do handle the onboarding and training ourselves.
Wamda: How do you train your drivers?
El Batrawi: When potential Ousta partners [private car companies] first approach us we do one-on-one interviews followed by drug testing, car inspection, and security checks. Once an Ousta passes this stage they take an extensive training course about safe driving, passenger safety, decorum, respect, privacy plus a complete course on how to use the app correctly and handle each and every possible situation they may face.
Wamda: Your social media and app are solely focused on the rider, why is that?
El Batrawi: By a simple Google search about ride hailing apps, you will easily find lawsuits and forums dedicated to complaints about safety and, more importantly, other apps leave too much power in the hands of the driver. i.e, the driver can only end the ride, then you as a rider can complain via email on in-app. With Ousta, you can request to end the ride if you are not comfortable or you can click on the S.O.S button and our team will intervene physically and digitally in real time, we believe we are truly fixing the balance of power in ride hailing.
Salah: All regional and international competitors are more one-way communication-based, as opposed to actually entertaining, engaging and responding in real time to complaints and feedback, which is exactly what we do.Egypt has the highest number of user interactions on Facebook per minute, this is a highly untapped source for generating buzz, getting more partners and building brand awareness, loyalty and customer service interaction.
Wamda: What’s your cut and are you profitable yet?
Salah: Ousta’s cut [is] 20 percent from each ride. However, the sole focus of our revenue has been and still is expansion and scaling up. Hence us being currently in investment talks, [because] scaling is a big cash burner.
Wamda: What is next?
El Batrawi: Everywhere is next. Egypt has 27 governorates and all are in dire need for reasonable, affordable and safe rides and with millions of smartphones on the market, but this does not mean to go 100 percent local and cover each Egyptian city, village and street, and forget other countries. We are currently planning to expand into another country in the region this summer.