AVIATION & TRANSPORT

Car app Uber admits poaching Middle East rival’s drivers

Smartphone ride-sharing service seen using ‘aggressive’ measures by rival Careem. (Shutterstock)

The smartphone car service Uber has admitted trying to poach drivers from its main Middle Eastern rival, following a string of allegations over ‘dirty tricks’ in other markets.

An Uber executive acknowledged that the company has booked rides with rival Careem with the intention of recruiting drivers to work on its own platform.

Careem confirmed what it called an “aggressive” practice – but said that it was “fair game” in a competitive market.

There is no suggestion that Uber has engaged in any wrongdoing or illegal activity.

But the acknowledgement that it has recruited an unknown number of its rival’s drivers follows a string of allegations against the company in other markets.

In the U.S., there have been reports of Uber officials ordering cars from competitor Lyft in order to recruit its drivers, and that it has deliberately ordered and cancelled rides from New York rival Gett.

Most recently, a top Uber executive described a plan to “dig up dirt on journalists who criticize it and sully their reputations”, according to a New York Times report.

Jambu Palaniappan, Uber’s regional general manager in the Middle East and Africa, confirmed to Al Arabiya News that the company had made bookings with rival Careem in order to “have a conversation with the driver about what their business is like and if they're interested in an alternative.”

He said Uber paid for the rides in those instances, and that the company encourages drivers to work for more than one platform. Drivers tend not to be contracted directly by ride-sharing apps; they generally work for other taxi companies.

“The fundamental premise that the drivers are Careem’s drivers is one that I would disagree with,” Palaniappan told Al Arabiya News.

“These are drivers that work for limousine and taxi companies across Middle Eastern markets,” he added. “For us, it’s about giving those drivers and companies an option.”

Palaniappan said that the company had not deliberately cancelled rides in the Middle East market, as has been alleged in other markets.

“We never cancel rides without paying the appropriate fees,” he said. “That’s not something we’ve employed here, and that’s not something that’s part of our business.”

‘Aggressive’ tactics

Magnus Olsson, the founder and managing director of Careem, confirmed that Uber had used “aggressive” tactics against it.

But he said they were “fair game” in what is a competitive market.

“On the driver side, we have seen behaviors where they are targeting drivers that are working on the Careem platform, with strong incentives to come and work for Uber,” he said.

“We definitely see them competing. And that’s all fine and it’s really to the benefit of customers.”

He said Careem had not noticed any “extraordinary behavior” or patterns whereby the company has received lots of cancelled bookings.

Rapid expansion

The Uber and Careem executives both spoke on Thursday at the Abu Dhabi Media Summit, which closes today.

Speaking to Al Arabiya News, the smartphone car services both said they are entering Egypt as part of their rapid regional expansion plans.

Olsson said Careem is currently present in 13 cities including Dubai, Abu Dhabi, Beirut, Lahore, Karachi and five in Saudi Arabia. It plans to launch in Cairo on Tuesday.

“We all know about the traffic situation in Cairo, so we’re not expecting it to be easy to be operating there, but we believe there is a gap,” he said.

He said there are plans to launch in further cities, with potential opportunities in Oman, Jordan and across North Africa.

“We want to be in all major cities in what we consider our target footprint, which is the broader Middle East,” he said.

Careem, which is not currently profitable, is backed by STC Ventures and other investors.

Olsson said an unnamed Saudi Arabian “strategic partner” is about to make a “multimillion dollar” investment in the company. He declined to name the partner, saying an announcement will be made next week.

“[The investment] is to continue to scale very aggressively in the cities we are in. And the second thing is to continue the geographic expansion.”

Global rival

Careem was lauched in the UAE and is a product of the Middle East. But it faces competition from its global San Francisco-headquartered rival.

Uber is active in more than 200 cities globally, including eight cities in the Middle East. It launched services in Cairo today.

“Cairo is an interesting place, in that it’s a massive city, with a lack of transport alternatives and – I think I can politely say – not the best infrastructure,” said Palaniappan.

“We cannot actually put enough cars on the road to meet demand… This region is one of our fastest-growing globally.”

Uber plans to launch in Morocco, Jordan and Bahrain "within months", he added.

He declined to specify whether Uber is profitable, but said competition had been a positive force in the business. “Competition forces us all to be better,” he said.

 

 

 

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Last Update: Saturday, 22 November 2014 KSA 12:37 - GMT 09:37
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Car app Uber admits poaching Middle East rival’s drivers
Smartphone ride-sharing service – under fire for ‘dirty tricks’ elsewhere – seen using ‘aggressive’ measures by rival Careem
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