Passionate entrepreneur Mudassir Sheikha is spearheading a new movement of forward thinking entrepreneurism with his high-end car booking service that tackles the rising global challenges within the ground transportation industry. In an exclusive interview with SME Advisor, he talks pricing, staying ahead of competition and his plans for future expansion…
How did Careem come about?
Before we launched Careem, we were management consultants and travel was a major part of our job. During that time, we realised that travel essentially had three important elements – hotels, flights and cars. Flights and hotels had several number of service providers with streamlined search, booking and payment facilities. But when it came to cars, there were very few reliable, consistent and affordable sources available.
We identified a problem and wanted to solve it. That’s how Careem came about. Initially, it was just a basic Web service – you go online and make a booking from Point A to Point B, it was as simple as that. Our first clients were consultancies, who we knew were faced with this problem. Of course, the corporate market was sizeable but the consumer market for ground transportation was significantly bigger. The GCC alone is a $5 billion market and if you count the broader Middle East it becomes a $10 -15 billion market. So, it was a tremendous opportunity. A year after we entered the corporate market, we enhanced our offering with a mobile app and started working with the consumer market. Again, we were looking to solve some of the challenges consumers faced on a daily basis when trying to get from one place to another.
How many markets is Careem currently operating within?
We are now across 18 cities and 10 countries. So all the way from Morocco to Lahore and everything in between. Our biggest markets, however, are KSA, Egypt and UAE. Every city is different and has its own set of challenges. Every time we enter a new market, we spend the first few months doing research and subsequently adapting and tailoring our offer to the unique needs of the market. Internally, we call it a product market fit. This includes a thorough scoping of the profile of the consumers as well as the requirements of the drivers. We evolve the offering to meet the needs of all the stakeholders in that city. That’s how you achieve organic growth.
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What do you mind have in terms of future expansion?
Between Morocco and Lahore, there are 40 urban centres and we are currently based in 18 of them. So, there are another 22 centres that we still haven’t tapped into. In addition, we would like to further expand into the countries that we already have a presence in. For instance, we might have operations in Riyadh in KSA, but not in Medina, Mecca and so on. That is something we are actively working on.
How do you work with the stringent policies and regulations of entering into a new market?
Our experience has been fairly seamless – we have been warmly welcomed by the consumers and the policy makers across most markets that we have made an entry into. I think this is because we are providing a valuable service that benefits all the stakeholders. The consumers enjoy improved service, the suppliers get more business and the regulators experience a highly efficient ground transportation system. It is also important to understand that we are working with existing licensed suppliers in the market and catering to the existing consumers. We are simply an online platform connecting them more efficiently with each other. With a technology such as ours, we are able to enhance the ‘matchmaking’ between the taxis and the customers.
With a company such as yours, how important is it to stay ahead of the technological curve?
Technology is a big part of the business and this is reflected in how quickly our tech team is expanding – we currently have about 80 people managing our technology function and they are spread across the board. We have IT, engineering and data sciences teams in Germany, Dubai and Pakistan and they are dedicated to continuing research and development of our back-end software.
How do you ensure that you are offering competitive pricing to customers?
The regulation on pricing differs from market to market. In Dubai, for example, RTA requires that our prices are at least 30 per cent above the taxi prices. We have priced our services at the bare minimum that we can. So, if you look at our economy service, those prices are exactly 30 per cent above taxi prices. Of course, we run promotions and special offers from time to time which make the offer even more affordable. On the other hand, in a market like KSA, the law requires that we price our services at par or above taxi prices.
Who do you see as your competitors? What makes you different?
Our primary competitor is the San-Francisco based company Uber, which made its entry into the Middle East in 2013.
I think what makes Careem different is the fact that it was built in the Middle East, for the Middle East. For instance, we have an option to make advance bookings – a facility that is deemed to be quite important in this market. In addition, we have our own customised maps for this region to enhance our offering and increase our accuracy of location. We have a 24/7 call centre through which customers can make bookings, share feedback, ask questions, and so on. We also provide a range of payment options; in KSA, for example, customers are able to use Saudi Telecom loyalty points.
What do you think makes Careem an attractive proposition to your investors?
When you approach someone for external funding, you have to look at things with an investor’s mind-set. What does the investor want? Based on my experience with Careem, I believe there are two fundamental areas:
- Size of the market: They want to work with companies that have a business idea that will solve a big problem or gap in the market. Careem’s market size is huge and that appeals to investors. In fact, we are not just restricted to the taxi market, there are many people who were previously driving their own cars that are now using our service.
- Organic growth: In addition to your market size, growth is a critical factor that investors consider. I’m very pleased to say that Careem has been growing 30 to 40 per cent month on month. This is exciting to investors.
At Careem, we have been extremely fortunate to work with a raft of investors that have brought on strong governance frameworks, mentoring and a wealth of management experience, in addition to financial support.
What were some of the major challenges you had to face along the way?
Looking back, I can’t help but say that we’ve had such a rewarding journey. However, if I had to highlight the top three challenges that any entrepreneur has to face when starting out a new business, I would say –
a) Cost of starting a business: The initial set-up costs can significantly impact a business owner with limited funds.
b) Lack of a proper funding ecosystem: Most businesses look to bootstrap because the ecosystem for external funding is still quite weak – there is limited access to angel investors, VCs and so on.
c) Skills gap: The reality is that a vast majority of the skilled talent prefers to work for MNCs; they aren’t willing to take the risk and work with a small business. We are experiencing a slow shift in the trend but SMEs still find it difficult to find the right talent.
Where would you like to see Careem in the foreseeable future?
The way I look at it, any institution has four primary characteristics. It has to be:
- Socially responsible
- Producing leaders
This is exactly what I have in mind for Careem – I want our brand to become an embodiment of these core values, while staying aligned with our mission: “Simplifying the life of people by building an awesome company that inspires”!