Careem is Expanding its Digital Services, What Does it Mean for the Region?

Careem released its super app this month at a very critical time. The app which offers more than Food and Rides came out as some governments are easing the restrictions and cautiously looking to the future. With the escalation of the COVID-19 spread back in March, demand for rides has plummeted as stay-at-home orders came from governments across the globe to combat the spread of the virus. With businesses and individuals complying, the only active sector of the economy during these times is e-commerce. Each business is trying to find its brook of online orders to stay alive. It may seem necessary for Careem's survival, after slashing 30% of the workforce, to use existing technological infrastructure to boldly enter other markets it was not known for.

Now, Let's take a look inside the app update to read the company's move as it's operating now as a full subsidiary of Uber.

• Bikes

Renting a bike from a Careem app is a natural development of the tech company that specialized in people's mobility. I would like certainly to try it at the nearest opportunity even just for fun.

It's worth noting that Bikes opens in another app called Careem Bikes.

• Shops

Now, you can order daily essentials from supermarkets, pharmacies, or other businesses.

A new competition for Instashop which has been in the market since 2016, and Souq.com, now Amazon, was their first investor.

• Delivery

New competition for Fetchr, Careem users can also choose a business not yet on the Super App and have goods purchased and picked up by a Captain and delivered to wherever they are.

This is a smart move by Careem adapting quickly to the prolonged lockdown that we are still living in, with some areas stricter than others. With more people staying at home, Captains may be getting fewer rides but more delivery orders are being placed from home.

• Careem Pay

Every customer has access to Careem PAY – making it simple to pay for all services securely. People can also transfer credit via Careem PAY to pay back family and friends or easily split a bill.

This will come as bad news for startup Ziina, which recently raised 850k USD pre-seed capital to meet peer-2-peer money transfer needs and, as the PR said, to split Careem fare.

• Loyalty Program

To keep a returning customer and incentivize the 33 million registered users to use the new services.

Like Uber, Like Careem

Careem's reaction plan to the economic crisis caused by COVID-19 could be coming from Uber's playbook. Uber's heavy spending on research and development of autonomous driving vehicle solutions, networks of vertical take-off and landing vehicles (Uber Elevate), and new solutions to solve everyday problems such as ridesharing, is summing nearly $2.9 billion in 2019. Dealing with the year to year losses, which was $1.1 billion in 2019, Uber used its existing infrastructure to expand its portfolio of apps such as Eats, Freight, and Work.

Similarly, when losses hit the bottom line, Careem came up with the Super App to tab into revenue-generating sectors as seen in the new feature Shops.

Customers are excited

There is an excitement around the new app, customers tend to trust a large brand when it comes to the quality of service. There is no better brand than the middle east's only unicorn. Careem entering these markets will just press its competitors to level up, which all going to benefit the end-user, eventually.

Increasing competition among startups

Now that Careem is part of Uber, Careem is expected to have access to Uber resources from talents, funds, and technology. That's not all, Careem will be looking also to use past experiences as leverage going into the new markets, here are few:

1. Developing differentiated products suitable for the local market ( Women drivers and cash payments, Careem Bus, etc... ).

2. Better maps for the region comes after scanning 45k miles of roads and creating their maps version.

3. The overall quality of transportation service ( including security background checks and delivery time, etc.. ).

Entrepreneurs should take notice because anything about handling payments, pickup & delivery, and mobility Careem will be a strong competitor. Handling Laundry seems a natural extension to this portfolio simplifying everyday life.

Conclusion

My opinion about the super app is not a very common one. First of all, I do not think that people have a problem with different apps doing different tasks, they may have a problem with many apps doing the same thing though. Bikes is already a different app plus the app crashes every time I press Shops. So it might be a good idea to make a portfolio of apps. Secondly, I think if most of the services start by pinning a location then the map as a first screen would be more engaging and a less distracting UI.

Finally, Careem's swift reaction to the crisis will give them access to the most active sectors of the economy, I like to call it "from home orders". That, for sure, will reduce the impact of the crisis on the bottom line and also help with a faster recovery. However, some questions remain unanswered, for example, Can Careem be a strong FinTech contender? Did Careem go too far by entering the grocery and daily shopping market? Is this going to be a long term strategy even after the crisis, competing in existing markets instead of creating new ones?

Only time will tell, but for now, all we know that the race is on.