Uber’s drive in the Middle East

      Published on Saturday, 17 March , 2018      653      
Uber’s drive in the Middle East

  • Technology

For Anthony Khoury, the general manager of Uber Middle East, the dizzying pace of change in the region – exemplified by Saudi Arabia’s sweeping reforms and the hustle and bustle surrounding Dubai Expo 2020 – mean one thing: opportunities.

Explaining how the ride-hailing app plans to evolve, Khoury tells Arabian Business that Uber will build on “a great year” of regional expansion in 2017, when it extended the service to previously under-served communities and areas in Saudi Arabia and the UAE.

“At the end of 2017, we were able to serve 80 percent of the Saudi population. Dubai was very similar. We’re now seeing trips being started and ending in very remote areas,” he says.

Uber’s drive in Saudi Arabia

As an example of the company’s success in the region, Khoury points to Uber getting the green light for additional growth in Saudi Arabia, a certificate for regulatory alignment by the kingdom’s Public Transport Authority issued in April.

Uber’s original objective was to enlist 100,000 Saudi drivers by 2020, but even that ambitious number has now been surpassed, much to Khoury’s delight. “We set this target at the end of 2016 but achieved it much quicker. In 2017, we were able to get 140,000 Saudi drivers,” he says, adding that Saudi Arabia has been “a huge success” for the company.

And last September’s royal decree allowing women to obtain driving licenses, starting in June of this year, “is definitely an opportunity”, despite media speculation that it may harm Uber’s business if women are able to drive – rather than be driven – to their destinations. “First of all, you look at all the other markets in the world where women can drive, and there’s still both men and women finding the value of using Uber. I don’t foresee people in Saudi thinking otherwise.

The difference in Saudi, of course, is that it remains a socially conservative country, where there will be some women who do not want to – or who are encouraged not to – ride with men. Khoury responds by saying that he’s “going to try to see if we can cater to that issue.” He explains how in addition to hiring Saudi women as drivers – a process that is expected to begin “shortly” before they can apply for driving licenses – Uber will launch a dedicated “female partner support centre” for Saudi women.

“It will involve everything from driving lessons and how to use the Uber app, to vehicle financing if they need it,” Khoury says. “It’s what we internally call a ‘green light hub’. Our driver partners go into the centre and submit their papers and from there the process begins. You will also be able, potentially, to get financing and a mobile phone. It’s a centre that will have everything available.”

Uber sees the recruitment of female drivers as another way of empowering women, something he believes his company started doing long before the announcement that women in Saudi would be able to drive. “Don’t forget it was not super easy for women there to commute to work,” he says of how Uber made ride-sharing popular in a country where that was previously not the case.

As Khoury sees it, women driving on the Uber platform and supporting other women creates a stronger economy.

The Expo factor

In Dubai, Khoury says Uber is working to keep pace – and expand – with the emirate’s ambitious plans, particularly around the development of large new areas as part of Dubai’s Expo 2020. To this end, Uber last year launched a three-month trial period of UberX, which aims to provide residents and visitors with greater access to affordable travel. “It’s a great collaboration between us and the RTA [Dubai’s Roads and Transport Authority] to pilot an affordable transportation method. It’s about 30 percent cheaper than Uber Select, which is amazing because people in transportation ‘deserts’ are now able to have this type of transport,” he says.

Khoury, however, is careful to note that UberX isn’t meant to compete with Dubai’s existing taxi infrastructure – the prices of which are roughly on par with the UberX service – nor with the emirate’s wider public transportation infrastructure. Instead, he notes that Uber is, in a way, feeding passengers to Dubai’s transportation infrastructure.

Uber is hoping to complement existing means of public transport

“We’ve seen during the pilot period that not only are we able to target transportation deserts, but we are also adding value to public transport. What we’ve seen is a lot of people that are leaving these transportation deserts go and end their trip next to public transportation.”

He gives the example of how a customer transiting from Sports City to Rashidiya might take a “super-affordable” Uber to the metro. “The idea is to complement public transportation by targeting what we call the ‘last mile’ where you can use Uber, which makes a lot of sense.”

Going green

In October, Uber launched UberONE in Dubai, allowing users to request rides from a fleet of 50 premium electric cars, which the company is hailing as a viable, long-term solution to achieving a sustainable, clean ride vehicle network for the smart cities of the future.

Khoury says the reaction to this service has been “tremendous”, before explaining how Uber intends to align itself with the city’s Vision 2020 goals, which includes being not only a smart city of the future, but also a green one. “We have about 50 cars that are owned by the city and are on the platform. We want to continue growing this product offering, but we’re just starting and taking baby steps.”

Using the UberONE option on the Uber app, users are now able to request a ride from one of 50 Tesla Model S or Model X vehicles operated by RTA’s Dubai Taxi Corporation, for the same price as an UberBLACK, the company’s premium limousine service. “It’s a new experience. It’s still affordable and not extremely expensive. A lot of people are also conscious of pollution and a lot of people are using it to help green environment,” Khoury adds. “We’re definitely playing on separate angles and we’ve seen it really start very well.”

What’s next?

When asked what’s next for Uber in the UAE and Saudi Arabia, Khoury says the company plans to “double down” by ensuring it offers the right products for the right people. In Saudi Arabia, that means continuing to expand and determine the requirements of the kingdom’s soon-to-be-driving female population. In Dubai, Uber plans to continue pushing UberX as an affordable transportation option, helping more people travel to and from the emirate’s transportation deserts.

UberBLACK is the company’s premium service

Just as importantly, Khoury says that Uber will continue to work with regulators to help Uber expand into other parts of the UAE, including Abu Dhabi, where services were suspended in August 2016. “We definitely want to continue expanding our offerings throughout different cities in the countries that are ready. We’re in discussions with Abu Dhabi and want to get back.” But he admits that “the reality is that our vision is to be able to provide affordable transportation. The current [regulations] do not really permit us to do that. This is why we want to first work with the government to get to that point before we launch again.”

Khoury also points to Sharjah, where Uber doesn’t currently operate. “I believe there are also discussions, but I think what is important for us today is to have the proper framework and regulations so that we can achieve what we want.”

These challenges, Khoury notes, are a natural growing pain whenever Uber enters the fray in any new city, which in the case of the UAE is already blossoming into a relationship that is growing “tremendously fast”.

“When we enter markets it is normal to see a little bit of what [isn’t really] a clash, but a little bit of tension with the regulator. It’s a completely new way of looking at things,” he says. “At the beginning it was definitely a bit difficult, but today it’s an amazing relationship and it has really started to bear fruit.”

Uber’s business model

Uber Technologies isn’t a publicly listed company but they have released some statistics on their performance over the last year. Last month it revealed that it attracted $7.5bn in sales for 2017 worldwide but also accumulated losses of $4.5bn. But it’s not all doom and gloom for the company. In January, SoftBank Group led a $9.3bn investment deal, making it the company’s largest shareholder. It is betting that more people will book rides through an app instead of driving themselves in the coming years, and that Uber will find a way to make a profit from that sea change in user habits.

Category Technology | 2018/03/17 latest update at 10:42 AM
Source : Arabian Business | Photocredit : Google
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