‘RIDE-HAILING INVESTMENT CAN BOOST ROAD USAGE’
Careem, Uber’s rival in Middle East, draws growing interest from investors
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 ridehailing company Careem Inc.
“We believe ride hailing, or a version of it, is the best way to build public transport today,” said Mudassir Sheikha, here, where Careem was based.
There was a Middle Eastern city “that’s building a metro bus system for US$700 million (RM2.86 billion) that will transport 200,000 people. If they invested the same amount in ridehailing, 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 (Mena), this year was 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 is also going into transportation infrastructure. Contracts for road, bridge and tunnel projects in Gulf Cooperation Council (GCC) countries were forecast to rise to US$15.5 billion next year, from US$14 billion this year, said construction project tracker Ventures Onsite in a July report.
As GCC countries diversified their economies and their populations grew, “investment in the transportation sector is likely to be a top priority”, said the report.
“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,” said Sheikha, referring to Next Future Transportation Inc. The idea is to build eight-seat pods that will pick up 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 Magnitt’s founder Philip Bahoshy.
“The Mena region at large continues to develop its infrastructure, which will complement access to cars, the tracking of locations and interconnectivity.”
At the same time, he said, “ride hailing in its essence creates efficiency”.