Marking the first year of profitability since its initial public offering in 2019, Uber's chief executive Dara Khosrowshahi is looking to attract partners and expand reach.
His message to investors, in the Middle East and globally, is: “We continue to build for the long term, but we do so in a disciplined way. And that we will continue to be the leader in innovation around mobility in the Middle East, but also all around the world.”
Uber's CEO visited the UAE and Saudi Arabia last week, where he sat down with The National for an exclusive interview, and sees Uber’s biggest challenge as “scaling the growth that we have with the business, while staying connected to our everyday drivers – our drivers are incredibly valuable to us”. "We always have to remember that, as a company, we wouldn't be here without our drivers. And we never want to lose touch of that fact."
Mr Khosrowshahi described the Middle East as important and "one of our leading regions” that is driving Uber's long-term business strategy.
Uber, which operates in more than 70 countries, plans to continue expanding its operations in the wider Middle East and Africa region from its Mena headquarters in Dubai, where it has a team of a hundred working across the region.
"While we are a global company, we're very local in nature in terms of how we practise our operations on the ground”, Mr Khosrowshahi explained. Credited with turning Uber’s fortunes around, he considers visiting his teams on the ground “an important part of my serving as a CEO of the company”.
Born in Tehran, Mr Khosrowshahi spoke with deep knowledge about the region, whose people he describes as “incredibly educated and entrepreneurial”. “I was born here, it's a place that is very dear to my heart," he said, adding "one of my hopes is that the Middle East is able to demonstrate the latent entrepreneurship in it. And I think our partnering with Careem is an example of that". His excitement about the region is clear "I think there's so much potential here, and I'm really happy to see some of that potential. Now, coming down in this region, whether it's in the UAE or it's Saudi, it's incredibly exciting to see".
"One of my hopes is that the Middle East is able to demonstrate the entrepreneurship in it. I think there's so much potential here. And I'm really happy to see some of that potential now coming down in this region, whether it's in the UAE or it's Saudi Arabia, it's incredibly exciting to see.”
Part of his role as chief executive of Uber is to also oversee Careem, which Uber acquired in January 2020. Mr Khosrowshahi’s pride in Careem is clear. “Careem represented an opportunity to buy into and to build on the entrepreneurship that we saw in the Middle East,” he said.
Uber has kept the two companies operating separately in the region and largely independent, while Mr Khosrowshahi said “it has turned out to be one of the best acquisitions that Uber has made”.
“Both Uber and Careem have grown in the region and what we didn't want to lose is the entrepreneurial fire that we saw from Careem in the region. So we actually kept the Careem team largely independent,” he explained.
Careem has been focusing on its “super-app”, in which UAE telecoms and technology company e& has bought a majority stake in a $400 million deal.
“As Careem continued to develop in the region, they really started to focus on the super app concept, a one-stop shop app that has so much available for you, not just mobility, but delivery, and grocery and membership and discounts on eating out, moving money around. The strategy developed into something broader than the Uber core strategy and that was actually when we started talking to e&, to bring them in as a partner to really help Careem get to the next level strategically”, Mr Khosrowshahi said.
As a consequence, “Careem is not only a part of Uber, but it's also a big part of the e& strategy going forward. And we think sky's the limit for the Careem brand”, he added.
On the future of Uber's business in the Middle East, Mr Khosrowshahi said “growth in the region is all about mobility". More than two-and-a-half million drivers have moved more than 65 million riders in the Middle East and Africa since Uber first launched.
"The good news for us here is that the region is growing, it's absolutely exploding in terms of the population in terms of the continued penetration of the internet. And it's a young population that's increasingly urban, and it's increasingly mobile. And our business continues to grow with it. And at the same time, we continue to penetrate into the region. So, we think the future is bright”.
A big part of Uber’s global strategy is being more environmentally conscious, which means the increased use of electric vehicles, EVs. The UAE and the wider region are a big part of making that strategy a success.
In Dubai, more than 15 per cent of kilometres driven on the Uber platform are now in an electric vehicle – the company aims to increase it to 25 per cent by 2026.
“Climate is a team sport and it is a global initiative for us. Ultimately we want to go green be it in the US, or whether we are in the streets of Paris or Abu Dhabi,” he said.
“In some ways, our service here in Dubai and Abu Dhabi is leading” the company’s climate initiative.
“We're pushing very hard to continue to move our fleet over and transition over. And the good news here is that moving to electric is great for the environment, but our consumers love the cars and the quality of the cars is excellent. And so there's a win-win, and we continue to improve the service. Our customers love it. Our drivers save money on gas, and overall we do the environment well, but we do so in a way that benefits our business.”
Uber has committed to be a “zero-emissions transportation platform by 2040” globally and Mr Khosrowshahi “sees the Middle East and especially UAE, as the tip of the spear” in getting to that zero-emissions target.
During his visit to the UAE, Mr Khosrowshahi signed an agreement with Al Futtaim Electric Mobility Company, with an aim to increase electrification of more trips in the region.
The partnership will give drivers a wide selection of electric and plug-in hybrid (PHEV) vehicles to book on Uber’s platform. Al-Futtaim Electric Mobility Company will also increase charging infrastructure, making it easier for EV drivers to provide rides on Uber. This is one more step to fulfilling Uber’s commitment to having 25 per cent of kilometre drives in Dubai emission-free by 2026.
The partnership includes access to dedicated 'fast-charging fleet hubs’ through Charge2Moov by Al-Futtaim, ensuring that EV drivers on Uber can continue to provide rides with minimal downtime.
Meanwhile, Uber and other hail-riding platforms are having to deal with geopolitical developments in the US that could limit EV adoption. Last month, US President Joe Biden announced new tariffs on Chinese goods that include EVs.
Responding to a question on whether the US move impacts Uber’s plans to introduce more EVs into its fleet in the US, Mr Khosrowshahi said: “It does have an impact in that what we are looking for are affordable, quality EVs, and to the extent that the Chinese EVs become a bit less more affordable, that makes it incrementally more difficult for us to move over to EVs.”
However, he sounded optimistic that other manufacturers could fill the gap.
“What we see from the US manufacturers and the European manufacturers is that there are high-quality automobiles coming out at affordable prices. So, while we would like as many EVs as possible, as cheaply as possible, we think that our ambitions and our climate ambitions in the US and Europe are going to continue to move ahead," he said.
As discussions over EVs continue globally, there is more focus on autonomous vehicles (AVs), in leading urban centres like the UAE. Uber is looking into how AVs will affect its business. Mr Khowrowshahi oversaw a decision to sell the AV unit of Uber in 2020. He believes that decision is still a sound one, explaining “my goal in Uber isn’t comfort, it is speed”, adding “a partnership model is right for Uber”.
He explained: “What we bring is unparalleled demand on a global basis, over 150 million people coming to our platform. And we want to offer all modes of transportation to those 100 and 50 million people on a monthly basis, whether that's a regular car, whether that's an EV, or it's an autonomous car as well.”
He doesn’t see this as a threat to Uber drivers, saying: “The evidence that we see in many industries is that autonomation becomes a complement to human labour”, adding “what we're building is a dynamic dispatch layer that intelligently determines whether the ride that you're requesting should be fulfilled by a human or a robot.”
Uber expects the option of AVs to be available in the UAE soon, but has not set a specific time frame.
“We are in active discussions with multiple partners," Mr Khosrowshahi said. “We see the Middle East as leaning forward and really looking to innovate here. So I'm quite hopeful as to our AV strategy here in the Middle East over the next five to 10 years.”
Flying taxis are also potentially going to be available in a “seamless, spectacular experience,” where they will be part of the transportation-mix, he said.
Uber is now in a strong position after challenging time during the Covid-19 pandemic. Asked about what he learned from that time, Mr Khosrowshaji said "Covid was an incredibly difficult time. And it forced us to reflect this company to what our priorities were. 80 per cent of our mobility business, which at the time was the most profitable part of our business, disappeared, seemingly overnight". However, "we have the good fortune of having been on delivery and the delivery business exploded in a wonderful way and was a lifeline for many small businesses to stay afloat during Covid, which we're quite thankful for".
He sees the pandemic as having served "as a forcing function for us to determine what areas we should focus on, and what areas we should dispose of, that was a time when we sold our autonomous efforts, some of our efforts around bikes and scooters and became a leaner and more focused company". Since then, "for us at Uber, it is about creating this marketplace of mobility and delivery, supply and demand and partnering with a whole industry, in driving urban logistics forward".
Having turned that corner, Mr Khosrowshahi is bullish. He described Uber now as a "great success", adding "we're at $150 billion plus run rate in terms of gross bookings, we continue to grow at 20 plus per cent growth on the top line while being profitable". He also added that "within our industry, we're unique in our ability to grow at scale, but do so profitably at this point".
Mr Khosrowshi's own experience, with his family leaving Iran when he was 9 years old following the fall of the Shah of Iran, influences some of his thinking on the role Uber can play to enable others. "For me, the the opportunity that we afford our drivers to earn a living, to move from the grey industry into the official industry - that opportunity to be on a road to a better life, for me, is a metaphor for my opportunity when I came to the United States", highlighting the opportunity Uber can give its drivers. He added "I think everyone deserves a chance to succeed. I was incredibly lucky and had my chance to succeed. And if we can give the same chance to 7 million drivers are on a platform today, I consider that quite a success".
