When two young, bright management consultants launched the ride-hailing app Careem in Dubai seven years ago, Uber dominated the global market. Cynics might have thought the pair stood little chance in going up against the San Francisco company's vast reach and technological prowess.
But Careem has confounded those expectations and today boasts 33 million registered users and 1.2 million drivers across more than 90 cities, from Pakistan to Morocco. In the UAE, it has become part of the landscape of transport options and inspired others with its start-up tech model. That success was confirmed this week when Uber agreed to acquire Careem for $3.1 billion in a deal that will ensure both will still operate independently, with a broader range of services to include food delivery and ride-sharing.
Not only is this one of the region’s most lucrative deals, it is, in many ways, archetypal of the success story of the UAE. The company’s co-founders, Pakistan-born Mudassir Sheikha and Swedish Magnus Olsson, met in Dubai while working at consultant McKinsey, saw an opportunity in a burgeoning financial and tech hub and tapped into its potential to grow.
Like most start-ups – of which more than half fail in the first four years – Careem has not had a smooth ride. It suspended its services in Abu Dhabi in 2016 over concerns about pricing regulations and faced protests from taxi drivers in Egypt. Last year, the data of more than 14 million customers was hacked. But few successful businesses today can claim it was plain sailing to get there.
Crucially, the deal will act as a catalyst for investment and entrepreneurialism in the UAE and beyond. It allows Uber to emphasise its global reach ahead of a mooted IPO and gives Careem the funding and expertise required to improve and expand its business.
As Omar Al Olama, Minister of State for Artificial Intelligence, tweeted, it “shows the world that the UAE is where dreams can be dreamt and achieved.”
These are exciting times for tech in the Middle East and North Africa, as governments across the region look to nurture start-ups, where a vast consumer market remains largely untapped.
Ultimately, customers who rely on Careem for safe, clean, affordable travel, including the millions of women it empowers, can look forward to a more efficient service. But it is worth taking a moment to consider the extraordinary rise of Careem, from an idea in 2012 to a value of $3.1bn today.