Uber and Careem try new products amid UAE regulatory challenges

The app-based private car hire companies Uber and Careem are experimenting with a range of new products in the UAE in a bid to win customers over, even as they face regulatory challenges in the country.

Careem aims in the near future to help e-commerce companies collect payments from customers by using its taxi fleet to pick up cash.

In the UAE, e-commerce firms struggle with consumer insistence on paying for new purchases with cash, and sometimes rejecting products and sending them back to the retailer. Careem and the e-commerce retailer Souq.com previously offered a service that allowed customers to try out products from Souq before committing to a purchase.

Other promotions include delivering Christmas trees, and offering free flights to a range of holiday destinations to app users who told the company what they were thankful for around Thanksgiving. During Ramadan the company launched an initiative to offer iftar meals to labourers in the UAE, and to orphans in Morocco.

“It’s very simple,” said Tariq Sanad, Careem’s chief marketing officer. “The more we utilise our cars, the less dead time they have, the more efficient they are.”

Uber launched UberPool in London last week, a car pooling service that steps on territory occupied by the US car sharing app Lyft.

Uber in the US is planning to act as a delivery service for retailers, in a bid to benefit from booming e-commerce. And visitors to the Abu Dhabi Formula One could pay Dh2,000 to rent a helicopter from UberChopper to land them on Yas Island.

The deluge of new products and experiments are designed to generate media attention and boost user traffic.

But they are also a tool for businesses that rely on high-volume data collection to figure out what else can be done with a fleet of cars and a large number of smartphone-enabled customers.

“The platforms of Uber and Careem at the moment cater to individuals and business who want a push-button experience to get them from one place to other,” said Omar Kassim, chief executive of the e-commerce site JadoPado. “But Uber and Careem are now trying to figure out how the platform can be used to move into logistics and ecommerce.” Both car companies have attracted the attention of the UAE’s regulators.

Dubai’s Roads and Transport Authority (RTA) is set to release a circular reminding Uber and Careem of the need to comply with government rules on pick-ups from hotels and pricing, The National reported last week.

This follows protests and regulatory scuffles in markets across the world, as entrenched transport authorities and taxi companies wrestle with upstart competitors who threaten to undermine their market position.

But the RTA is not the only agency Uber and Careem must do business with. As the companies move away from hailing cabs, and towards cash and payments, Uber and Careem will be entering the jurisdiction of other UAE regulators – including the Central Bank, which regulates payments systems.

“Diversification away from private car hires definitely helps your business,” said Mr Kassim. “But if you’re getting into different markets with different regulations, it’ll probably add additional complexity to the business.” ​

Deepak Khanna, who heads up the UAE operations of the International Finance Corporation, a World Bank body that supports small businesses, said that innovative tech companies were in danger of falling afoul of regulatory grey areas on online payments.

The UAE needs to do more to accommodate tech start-ups, Mr Khanna said, because the country does not provide a “stable legal and regulatory environment” for new business models like those of Uber and Careem.
Source: The National