Ride-hailing demand to rebound to pre-pandemic levels in 2021: Careem
Careem, an Internet platform for the greater Middle East, which was bought by Uber in a $3.1 billion deal in 2019, expects ride-hailing demand to recover to pre-pandemic levels "sometime" in 2021.
The spike in demand will be subsequent to a better-than-expected pickup as countries started to ease coronavirus-related curbs, the Dubai-based pioneer of the region's ride-hailing economy said.
Chief executive Mudassir Sheikha said that the ride-hailing provider planned for a recovery sometime next year, however "the recovery has begun and the recovery has been faster already than our initial projections. It's been a tough couple of months."
The company, which primarily operates in the Middle East, has seen its overall business, which also includes delivery services such as take-away food, recover at an almost double-digit rate week-on-week over the past two months as countries eased restrictions, he said.
Sheikha said that he is quite bullish on the rest of the year and the next few years as a result of some of the restrictions that "were put on our movement and the growth it led to in the adoption of digital platforms."
Careem shed nearly a third of its workforce as a result of the pandemic, laying off 536 staff.
Careem, as part of its plans to fast-track addition of more features to its Careem Pay Super App that has expanded to also include some payment services, announced on Sunday a multi-year agreement with Visa that will see Visa push payment services to become available through the app.
The partnership seeks to expand digital financial inclusion across the Middle East and North Africa region by integrating Visa credentials into the Super App.
The new app will provide Careem drivers with financial payment services that seek to resolve liquidity challenges associated with cash conversion, remittances and real-time access to funds.
Initially, Careem's captains in five countries will be issued with Visa card credentials. This will enable Careem captains to instantly access earnings from their daily trips in real-time as opposed to any time lags. Careem captains will also be able to use low-cost remittance solutions to make fund transfers to bank accounts and Visa cards worldwide, providing them access to cheaper modes of remitting money.
Junaid Iqbal, managing director of Careem Pay, said in a media briefing that the only way digital payments truly make a difference is when both sides of the market benefit. "Through this partnership with Visa, Careem will be paying captains in real-time, bringing them into the digital marketplace and removing the need for cash."
Marcello Baricordi, Visa's general manager for the Mena region, said that with the pandemic already reinforcing existing trends towards increased digitisation of payments, it is vital to introduce convenient and secure cashless solutions to bring formal financial services to the underbanked.
"Through our global payments network, VisaNet, we are helping Careem's Super App move into global commerce in a fast, secure, scalable and innovative way. Our next generation fund transfer solutions include earnings payouts, P2P transfers and cross-border remittances that are integral to economic recovery," he said.
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