COURSE: ENTREPRENEURSHIP

CASE STUDY

Careem: Mobilizing a Solution to a Problem Careem, the Middle East's first and leading taxi booking app-based service, was created as a result of two entrepreneurs' attempts to solve a region wide problem. Mudassir Sheikha, a 39- year old Stanford educated Pakistani, and his Swedish colleague Magnus Olsson travelled extensively in their capacity as consultants for Mckinsey & Company. During their travels to the Middle East and North Africa (MENA) region, they struggled to find an easy, quick, efficient, and reliable means of transportation. It also quickly became apparent that although Uber had provided a great solution to commuters' needs in many markets around the world, it had not yet entered MENA region, and this presented an attractive opportunity. Inspired by the global transformation of taxi-booking services and recognizing an under served market, the two-tech savvy consultants launched Careen in the city of Dubai, the United Arab Emirates, in 2012. Although Careem was initially launched for business customers, the company soon found that its users were booking rides for personal use, like airport trips, schools drops, and pick-ups. Expanding Regionally Careem is touted as one of the UAE's most successful start-ups, with growth of 30 percent month on month. Within five years of its launch, it has expanded to 60 cities across 11 countries, claims over 10 million registered users, and has over 250,000 contract drivers. Careem has ambitious plans to become leading transporter of people and things in the Middle East. With car ownerships as low as 2 to 5 percent in some countries and a large population of 700 million people in the region, there is a potential of between 150 million and 200 million trips a day - a huge opportunity for Careem. Taking the Home Advantage As a homegrown player, Careem has unmatched insight into the region's consumers, topography, infrastructure, neighborhoods, roads, and local commuting needs, allowing it to quickly act on the opportunity to develop better maps than and have a competitive advantage over Uber. Many cities and their neighborhoods in the region were inadequately covered by Google Maps and Nokia Maps, so Careem sent its own team to build a location database. The brand name, which means "generous" in Arabic, also worked very well with the local consumers. Playing the Local Favorite Close familiarity with the cultural and traditional values helped Careem to serve the regional markets well. In Saudi Arabia, where women were banned from driving until October 2017, Careem had a massive female following, making up nearly 80 percent of its customers. It even introduced a pre-booking facility for women so they could conveniently plan their trips. In Dubai, Careem launched its Ameera services, a ladies-only ride with a woman chauffer. In September 2016, in Saudi Arabia, Careem offered a special service during Eidul Adha, a popular Muslim festival during which an animal, usually sheep or a goat, has to be sacrificed and distributed to family, friends, and the poor. This requires trips to farms, where they are sacrificed and then brought home. Careem offered to provide this service: its drives got the animal, sacrificed it for the customers, and brought it to customers' homes according to the tradition. In situations where customers wanted the live animal to be transported to their homes, Careem arranged for pick-up vehicles for that too. Dealing with the Rivalry Uber entered the Middle East market in 2013 as a global brand with international appeal, changing the competitive dynamics in a growing market that presented an attractiveopportunity. Both Liber and Careem adopted competitive strategies to capitalize on that opportunity. Eareem already had a strong hold on the market due to its first-mover's advantage and local orientation. Due to its global dominance. Uber was able to raise $15 billion in venture capital compared to $425 million that Careem had raised. Faced with a changing competitive scenario and an aggressive opponent, Gareem focus on providing more localized solutions to the region. including better maps, pre-booking services, dedicated call centres, and a varied fleet. Gareem claims that over services operate only as a limo service, but it offers a different ride experience for everyone. For example. in Dubai. Careem offered different types of rides: Economy. Business. Careem Kids. MAX. First Class. and Ameera. While uber seeks global dominance. Careem is concentrating on being a leading regional player with a strong focus on local needs and wants. Source: Adapted from Entrepreneurship: Successfully Launching New 'v'entures. Pearson Education 2019. lI'L'IJUESTII'lL'llHI 1 a} Identifyr the market gaps that Sheikha and Olson lled by launching Careem in the Middle East. b} What role did their personal commuting experience in the region play in identifying the opportunity? c} How being a local player helped |Eareem to cater the needs of users in the region? What factors have contributed to its regional popularity\"? d} As the taxi-booking segment matures in the Middle East. how relevant will factors like innovativeness and rst-mover's advantage to be sustainable and continuous success? e} Considering the strong competition from the global leader. Uber. do you think Careem will be able to maintain its market positioning in the region