Uber, Careem hit the panic button with loss of 70% of Saudi customers?
When the ban on Saudi women driving was lifted last September, and with some 80% of Uber’s clientele and 70% of Careem’s being Saudi women, according to CNN, hail-a-cab companies let out a collective gasp:
“Oh, no.” “What are we going to do now?”
On the other hand, Saudi women were jubilant seeing that legalization would take place as soon as June 24, and a recent survey indicated some 9 million women were planning to drive, many of whom are currently attending driving lessons at female-only college campuses, in anticipation of the historic date.
“When the website for Saudi’s first driving school for women opened for online registration [in February], it attracted more than 165,000 applicants in just three days,” the Financial Times reported.
With Saudi women about to take charge of their own transportation, how are ride-hailing services like Uber and Careem coping with this?
The ride-hailing market
Such a shift in the Saudi transportation market could net major losses for Saudi hail-a-cab companies.
To top things off, the company has been registering losses in the past few years. Even though Uber, valued at $72 billion in February, returned $7.5 billion in 2017 according to Bloomberg, its losses totaled $4.5 billion.
As for regional company Careem, valued at $1 billion, it operates in 13 countries in the MENA region and Pakistan.
With the fear of impending losses right around the corner, both Uber and Careem have begun taking action to keep Saudi women involved. Abdullah Elyas, co-founder and chief privacy officer at the company told CNN that his firm is hoping to hire 10,000 drivers by June. He also said that they have received thousands of applications already.
“Female captains will help us provide a better service to many women who want to travel but refuse to be driven by men,” he says.
According to The Week, a UK online daily, “Careem also plans to add a new ‘Captinah’ button to the app in June that will allow customers to choose female chauffeurs.” The option will “only be available to other women and families,” Careem spokesman Murtadha Alalawi said.
Uber, on the other hand, is also taking measures to bring women into the fold. The service will establish new facilities dedicated to training female drivers. Zeid Hreish, Uber’s general manager in Saudi Arabia said, “We will partner up with necessary stakeholders to facilitate the paperwork, training access, and access to vehicles, including access to driving schools run by third-party partners.”
The Saudi government has shown support of these ride-hailing apps, evident when the government’s Public Investment Fund (PIF) poured $3.5 billion into the company in mid-2016. CNN notes that this is “the single largest investment in a private company ever made”.
As for Uber’s future, the company’s CEO Dara Khosrowshahi envisions it becoming the “Amazon of mobility”, following an interview with BILD. He seeks to push Uber into new markets by investing in electric bikes, food delivery (Uber Eats), flying taxis and an environmentally-friendly transportation option (UberGREEN).