Two years on from its launch in the city, ride-hailing service Uber is using its Middle East & Africa headquarters in Dubai to lay the groundwork for expanding in the region–through more than just operating in new cities.
Since August 2013, the US-based company, which connects drivers and passengers through smartphone apps, has commenced operations within the GCC in Doha, Abu Dhabi, Riyadh, Jeddah and Saudi Arabia’s Eastern Province, as well as a number of other cities in the wider Middle East and Africa.
Speaking to Bloomberg Businessweek Middle East, Uber’s regional general manager for Eastern Europe, Middle East and Africa, Jambu Palaniappan, says he is “bullish” on the company’s prospects for growth. “When I think about growth, I think about growth in two ways,” he says. “One is footprint and new cities. But I think also it’s about a more reliable product. More cars, more drivers, lower wait time, more efficiency.”
For footprint expansion, Palaniappan says the company was able to monitor downloads of the app in cities where Uber was not even available yet as an indicator of demand. “It’s one of the reasons we started in Casablanca for example,” he says. “Thousands of people had signed up for the product before we got there.”
Within the GCC, Uber is not yet available anywhere in Kuwait or Oman, although Palaniappan says they are “definitely on the radar,” while he pointed to the growth rates of Saudi Arabia’s secondary cities as another potential source of new business
Around the world Uber, living up to its reputation as major disruptive technology player, has regularly hit the headlines for its clashes with local authorities and governments, often resistant to its entry, as well as established taxi drivers and operators, who have seen it as a threat to their business. In the US city of Portland, Oregon, for example, it waged an intense lobbying and public relations campaign before finally convincing the City Council to update its regulations to allow Uber and similar services.
In contrast to that experience, Palaniappan says the partnerships Uber has developed with regulators and governments in the GCC and the Middle East have been some of “most positive globally.” “They are in their own right disruptors in a positive way,” he says. “And so I think working with technology companies like Uber is really part of their ambition and their mission, to bring in the most innovative solutions, to help build cities that are being built.
“The ambition is limitless, which is an interesting parallel to our company, which is [about] local ambition meeting global innovation. That’s where partnerships between Uber and governments in the region really fit well.”
Close to home at its Dubai headquarters, one recent government decision which may affect Uber has been the scrapping of fuel subsidies. While there is the potential for this to increase fares, as Uber seeks to create a balance between value for consumers and creating an attractive proposition for drivers, Palaniappan believes there could also be a positive impact. “I think the fuel price increase actually makes it more expensive for an individual to drive so maybe they’ll use services like Uber more,” he says. “And therefore the efficiency and liquidity we build onto the platform brings drivers into a world where they actually earn more.”
At the end of July, Uber was reported to have received an investment of about $100 million from Microsoft, giving the company a valuation of approximately $50 billion. It was said to be planning to use the cash to expand operations to cities across the globe. -Bloomberg
