Facing death made Magnus Olsson realise that life was “too short” not to follow his dreams.
At the age of 29, Mr Olsson, a Swedish national, had a brain bleed and almost died before several brain surgeries cured him.
Then a consultant at McKinsey, he decided to quit his job to set up Careem, a car booking service that uses technology to transport people across 18 cities in the Middle East.
“After that happened, I started to think really about the meaning of life and what I want to do,” he says. “I realised that whatever I do, I will be fine and it’s no longer a game of survival. I realised that I cannot live my life just surviving. I have to do what I really want to do.”
With this determination, Mr Olsson decided that he wanted to establish a business that could become big as well as meaningful. So he joined hands with his colleague, Mudassir Sheikha, and they brainstormed about that together.
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“We looked at industries that are meaningful. We looked at health care, we looked at education. We looked at food as fish farms, but then we realised we will smell like fish [if we opened one] and then we landed on Careem,” he says.
Through their experience as consultants, they realised that public transport is far from reliable in this region, so they decided to tap into this multi-billion-dollar underserved market.
“You learn in Cairo or in Doha that you would call a guy and you would hope that he would come on time or find his way. You need to go to a meeting, but you can get lost,” says Mr Olsson.
When it launched three years ago, Careem served corporate customers who made advance bookings. Now the business has evolved to include everyday individuals and families, which are both fast-growing market segments.
In Saudi Arabia, the market is booming, with three million women who could potentially work if they are provided with means of transport, according to Careem. “Eighty per cent of our customers in Saudi Arabia are females,” says Mr Olsson.
Careem has a staff of 150 who work in call centres, sales, finance and technology.
The company does not own a fleet of vehicles, but works as an aggregator for licensed limousine companies in the region based on a revenue-sharing agreement.
“They [limousine companies] are good at buying cars, employing captains (drivers) and running efficient fleet operations, but then they realise that they can work with companies like Careem, or Uber, or others to get business,” says Mr Olsson.
Reliability and quality of transport are lacking in Middle East markets, he says, adding that Careem takes full responsibility for customers’ satisfaction and strives to help limousine companies to improve their service.
“You as a customer, you come to us, you use our app, website, or call centre to book. You know that the car is coming from Careem, but if you have a complaint, you come to Careem and we will take care of it,” says Mr Olsson.
With an arrival-on-time rate of 99.3 per cent, Careem offers three types of bookings: a “now” booking, a pre-scheduled booking, and repeat – meaning a regular schedule for Careem’s service.
The business faces challenges such as unreliable street addresses and language barriers, creating a need for a call centre to liaise between drivers and customers. Careem runs three call centres in Dubai, Saudi Arabia and Cairo.
“If you give an app to a captain and an app to a customer and say ‘go figure it out’, it’s not going to be awesome,” says Mr Olsson.
Commenting on his rivals, Mr Olsson views Uber as “a strong competitor”, but says that Careem’s edge is its “tailored service” to Middle East markets. Its advantages also include different payment methods such as cash or credit cards.
In Saudi Arabia, Careem integrates payments with Saudi Telecom Company (STC), where mobile phone users can redeem STC’s ‘qitaf points’ through Careem rides.
“We are in talks with other telecom operators,” says Mr Olsson. “We are in talks with operators here in the UAE. This is a new space for them.”
Although Careem has yet to break even, the company plans to expand to Oman and other cities in Egypt, after launching services to Egypt’s northern region, close to Alexandria.
“You need to become really big and you need to do a lot of trips until this small margin pays off,” says Mr Olsson.
“We are growing about 25 per cent to 30 per cent month on month in terms of rides. This means after three to four months we have doubled the work.”
Careem is supported by STC Ventures (the venture capitalist arm of STC) and Al Tayyar Travel Group as well as several angel investors. About US$12 million has been invested in Careem so far to date.
In terms of the company’s best-performing markets, Saudi Arabia and Egypt top the list.
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