When Careem first launched its ride-hailing service, everything was done manually. Sourcing the drivers was done via SMS, user requests came through via email and the two co-founders, Mudassir Sheikha and Magnus Olsson would regularly find themselves on Google Maps, providing directions to the drivers on the phone.
Eventually the company began to automate the processes and invested in the development of its backend technology. It developed its own mapping system and used artificial intelligence (AI) to allocate drivers to customers in their vicinity and to predict journey times. Today, this technology, which was used to move people, now underpins its super app, which seeks to move physical goods and money too.
We met with the recently-appointed Careem’s vice president of engineering and mobility, Baber Shaikh, to discuss how the Covid-19 crisis has expedited the adoption of advanced technologies, his views on Careem’s experience in becoming a super app, and his priorities for Careem in the coming period.
Shaikh brings 20 years of engineering management and leadership experience having previously worked at Nvidia, Microsoft and Groupon.
How has the pandemic impacted the evolution of technology in our region?
Digitisation has definitely been put on steroids thanks to Covid-19. As people still have a fear of infection they have transitioned a lot of their activities to the digital realm, giving rise to cashless payments as well. So, the digitisation of e-commerce is happening at a massive scale. When we look at consumer spending, two per cent of our transactions in the region take place online today.
Naturally, this calls for the need to have the technology that could grasp the customer sentiment, customer behaviour and interest, to serve their needs online. As more digital activity happens now, you need the right systems to come in place to be able to adapt to that changing behavior and address the ever-changing needs. This also calls for the investment piece to come in. And we are seeing a lot of investments flowing in the technology sector lately, not just in the region, but in the US and the Valley as well.
Also, we will see more and more enhancements to the e-commerce experience in terms of personalisation and recommendation systems.
Which other technologies gained steam?
One of the exciting things that happened in 2020, was a lot of companies around the globe have realised the importance of machine learning and AI models not just in the quantitative space, but also in the qualitative space in the natural language processing, not just in English, but in Arabic and other languages as well.
Traditionally, companies were reliant on historic data, and when customer behaviour changed, all of these models were invalidated. Because you couldn't successfully predict an email, or certain traffic at certain times based on these data; you didn't have a sense of baselines anymore. So, having a real-time data analytics system, that can react and get feedback from the customer in real-time, was super crucial. That was the second big thing that happened in 2020. And you saw a lot of startups now taking very seriously not just having machine learning or data, but having models that can respond in real-time and have access to data in real-time.
What do you think has helped Careem pull off its pivot to become a super app?
One of the things that stood out for companies in the region, like Careem, is the fact that a lot of them were cloud-native, meaning they didn't have hardware on-site. They didn't have physical on-premise hardware. They were born on the cloud or Amazon Web Services (AWS), and that has allowed them to adjust and tweak their business model over 2020.
We also saw some major pivots in consumer behaviour last year, we saw the cashless payments drive up as well as food delivery and grocery delivery. We saw this side of business emerge and mature over 2020. Before that, I think there were nice ideas, but nothing happened at such a massive scale.
For a traditional ride-hailing company like Carem, they have grown into a super app, successfully migrated 96 per cent of the customers onto this new application, scaled out food and groceries, as well as digital payments (Careem pay), which doubled in terms of traffic, in a couple of months. So what we all saw was this great shift that happened, but what people don't realise is that Careem was able to make these adjustments, very quickly, because of their underpinning technology, which relied heavily on the cloud. So being able to scale up, offer more services, and transition very quickly was permitted because of this. As we look forward to the next three to five years, being cloud-native is a core component of any startup’s business strategy.
When a company like Careem, which knows well how to move something from A to B, decided to enter e-commerce, it was only a matter of time until they could build the catalogue, onboard the restaurants online, etc.
So, I think the ride-hailing companies as they enter e-commerce will actually make e-commerce a much more efficient process. I think the ride-hailing companies understand logistics better than anybody else.
What are your top priorities for Careem?
It has been so exciting to look at what’s happening at Careem and what is happening in the region as well, especially in the ride-hailing segment and it is interesting to see how the recovery has come along.
With the growing interest and demand in our e-commerce and food delivery business, we need to continue building a successfully scalable platform that could enable microservices and thereby allow us to meet the aggressive growth that we expect over the next five years. This is one of the biggest priorities for me at Careem.
Second, we will continue working to grow our talent. And this is a very exciting mission for me personally, to grow talent locally, to invest in strong in house internship programmes to develop and mature talent within the region. Moreover, the next big focus for me is to take advantage of data and AI within our tech stack, make our technology much more scalable, and ultimately be able to adapt and react very quickly to customer needs.
What are your predictions for the ride-hailing sector?
There’s been an initial dip in demand for ride-hailing services, but as people became more comfortable getting around, the demand has picked up. Now we actually have seen a rise in demand for ride-hailing traffic. We've seen it grow 10 fold in the last 10 months in terms of customer demand.
Additionally, in our region, only two per cent of the population have true access to mobility, so the demand for ride-hailing will continue to increase. In the next five years, ride-hailing will double in size as populations continue to grow and cities become more congested.