Ride-hailing market revs up in Egypt

Author: 
Reuters
ID: 
1573049269115699100
Wed, 2019-11-06 13:40

CAIRO: Competition in Egypt’s ride-hailing and tech-enabled
transport market is heating up as rivals from global giant Uber to
smaller local firms vie for a slice of the Middle East’s largest
market.
Operators say there is a lot more room for growth. Egypt’s
population will soon be swelling to 100 million. Taxis, minibuses,
tuk-tuks and motorbikes shuttle passengers and deliveries through
crowded, chaotic streets.
The biggest players are Careem and Uber, which had its IPO in May
and posted a wider third-quarter loss on Monday as it tries to
outspend competitors. The firms still operate separately despite
their merger in March.
Industry experts expect more mergers as start-ups try to gain
market share for bus or motorbike services.
Egypt is among Uber’s top 10 markets globally, and is seen as a
regional tech hub — start-ups such as digital payments firm Fawry
have set up shop in a tech park outside Cairo.
Uber has 900,000 active drivers in Egypt, operates in about half of
Egypt’s 27 governorates, and is looking to expand next year to
the resort town of Sharm el-Sheikh and southern Egypt, its Egypt
General Manager, Ahmad Hammouda, told Reuters.
Both Uber and Careem introduced bus services late last year after
the founding of local start-up Swvl, which runs buses along fixed
routes via an app. Swvl has already expanded into Kenya and
Pakistan.

FAST FOOD
Besides buses and passenger vehicles, Uber and Careem motorbikes
also compete with Egyptian start-up Halan, which launched in
November 2017 and operates in more than 20 Egyptian cities as well
as Sudan’s capital, Khartoum.
Tech-enabled food delivery is also expanding rapidly, where Uber
Eats competes with Halan, local start-up Elmenus, Spanish start-up
Glovo and Otlob. Germany’s Delivery Hero bought Otlob in 2017 and
has a stake in Glovo.
Halan uses motorbikes to deliver food, tuk-tuks for passenger
transport and cargo tricycles for goods. It has partnerships with
fast food chains including McDonald’s, KFC and Pizza Hut in Egypt
and is now targeting smaller restaurants.
It has around 10,000 active drivers, CEO Mounir Nakhla told
Reuters.
Launched in June 2011 as a catalogue of menus from restaurants,
Elmenus began delivering food via its platform late last year and
is due to start using its own delivery vehicles this month, its
founder, Amir Allam, told Reuters.
Glovo plans to invest 5 million euros ($5.54 million) in the
country, where it says smartphone use is growing rapidly but just
one quarter of deliveries are ordered online.
“There will come a time when somebody, or a couple of players,
will dominate,” said Elmenus’ Allam. “But this is still a
long way to go because the market is growing massively.”

SIZE MATTERS
Maged Dessouky, a transport expert at the University of Southern
California, said it was hard to predict who would prevail.
“Size matters, but size isn’t everything,” he said. “Of
course, when we get to autonomous vehicles, it’s going to be very
interesting. That’s going to change the equation
completely.”
Despite the optimism around the sector, there are uncertainties. In
September, Egypt’s parliament passed a law governing ride-hailing
apps that will require them to keep data for six months and share
it with the government when asked.
Earlier this year, Uber riders and drivers in Egypt faced technical
difficulties with the Uber app, which two security sources said was
linked to data-sharing disputes with the authorities.
The Egyptian Competition Authority (ECA) is examining Uber’s
acquisition of Careem and new entrants are still appearing.
Earlier this year, billboards sprang up across Cairo advertising
ride-hailing firm Dubci, prompting speculation that Egypt’s
powerful military, which has been expanding its business
activities, was behind it.
The billboards have mostly disappeared, and news about Dubci has
been scarce since the military denied ownership in July. Reuters
could not reach the company.

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Ride-hailing market revs up in Egypt