The Careem Business Model: How the Super App Took the Middle East By Storm

Published on December 26th, 2023

The emergence of ride-hailing apps has disrupted the traditional taxi and transportation industry around the world. Companies like Uber, Grab, and Lyft have revolutionized the way people travel by providing them with convenient and reliable on-demand transportation services. However, one company stands out in a market that is often dominated by global players – Careem.

Founded in 2012 by Mudassir Sheikha, Magnus Olsson, and Abdulla Elyas, Careem is a Dubai-based ride-hailing app that serves the Middle East, North Africa, and South Asia regions. It started out as a one-city operation in Dubai but has now expanded to over 100 cities across 14 countries. In just eight years, Careem has grown into a billion-dollar company, with a valuation of over $3 billion.

How did the Careem taxi app become a super app?

Unlike other ride-hailing apps that offer only transportation services, Careem has transformed into a super app that offers a wide range of services to its customers. It all started with the introduction of “Careem NOW” – an on-demand food delivery service in selected markets. This move not only helped Careem diversify its business but also allowed them to tap into a growing market of online food delivery services.

But that’s not all. Careem has also expanded its offerings to include courier and delivery services, bike-sharing, and even digital payments through their “Careem Pay” feature. This strategic move to expand the range of services has helped Careem become a one-stop-shop for all transportation and logistics needs in the Middle East region.

Today, Careem is a super app with three value propositions:

• Mobility of People – Careem’s core service is an innovative platform that revolutionizes transportation by providing convenient and reliable on-demand ride-hailing services. With just a few taps on your smartphone, you can easily book a ride and experience a seamless journey to your desired destination. Whether you need a quick ride to the office or a comfortable trip to the airport, Careem’s efficient and professional drivers are ready to cater to your transportation needs. Say goodbye to the hassle of waiting for taxis or dealing with parking, and embrace the convenience and peace of mind that Careem’s ride-hailing service offers.
• Mobility of Things – Careem’s expansion into courier and delivery services has made it possible for customers to send or receive packages, documents, and even groceries with ease. With the option to track your deliveries in real-time, Careem promises a safe and efficient service that eliminates the stress of logistics management. Plus, with their bike-sharing feature, you can easily rent a bike and navigate through congested city streets, making your commute faster and greener.
• Mobility of Money – Careem Pay is an essential feature that provides digital payment solutions for all transactions on the app. With this cashless option, you can top-up your wallet, pay for rides, deliveries, and even make online purchases seamlessly. Careem’s partnership with Mastercard has also made it possible for users to enjoy exclusive discounts and rewards when using their card as a payment method on the app.

Careem Statistics At a Glance

The Careem business model has revolutionized the transportation industry in the Middle East by offering a convenient and reliable ride-hailing service. With its user-friendly app and a wide range of vehicle options, Careem has quickly gained widespread popularity among commuters and travelers alike. From bustling city streets to remote suburban areas, Careem has become the go-to choice for reliable and efficient transportation in the region.

How Does Careem Work?

Careem follows a similar business model to other ride-hailing companies like Uber and Lyft. However, it has incorporated unique features that cater specifically to the needs of the Middle Eastern market. Here’s how Careem works in three simple steps:

1. Download the App: Users can download the Careem app for free from the App Store or Google Play Store.

2. Book a Ride: Enter your pick-up and drop-off location, select your vehicle type, and confirm your booking.

3. Track and Pay: Once your ride is confirmed, you can track your captain’s arrival in real-time on the app. Once you reach your destination, you can pay seamlessly through the app using Careem Pay or cash.

What’s Careem’s Business Model?

Careem operates on a commission-based business model, where it takes a percentage of each ride fare as revenue. However, it also earns through various other sources like surge pricing during peak hours and advertising partnerships with businesses. In addition to ride-hailing, Careem has expanded its services to include food delivery, bike rentals, and even car purchases. This diversification allows the company to generate additional revenue streams and cater to a broader market.

• Captain App – Careem’s business model also involves providing its captains with a dedicated app to manage their rides and earnings. This helps in streamlining the process for both customers and captains, making it more efficient.
• Passenger App – Careem’s passenger app has a user-friendly interface and offers various features to enhance the overall experience. For example, users can select their preferred language and currency for ease of use.
• Careem Rewards – To retain customers and encourage frequent usage, Careem launched its rewards program called ‘Careem Rewards’ in 2018. Customers earn points for each ride they take and can redeem them for discounted or free rides.
• Partnerships – Careem has partnered with various businesses to offer discounts and promotions to its customers. This not only benefits the customers but also helps in expanding Careem’s customer base through cross-promotion.

Features of the Passenger and Driver/Captain App

The Careem Operating Model

The success of Careem can be attributed to its unique operating model. The company operates as a tech platform connecting passengers to captains (drivers) and vice versa. Let’s take a closer look at the various aspects of this operating model:

• Client Call Center – Careem, a leading transportation company, values its clients and captains by providing a dedicated call center to cater to their needs. This commitment ensures prompt and efficient customer service and support, reflecting Careem’s dedication to excellence in every interaction. Whether you have a question, need assistance, or have feedback, our dedicated team is always ready to assist you. Your satisfaction is our priority.
• Careem’s Location Data – The company effectively utilizes precise location data to enhance its services and operational efficiency. By leveraging this valuable information, Careem gains deeper insights into passenger demands, traffic patterns, and other key factors that influence their operations. With this knowledge, they are able to optimize their services and provide faster, more efficient rides for their customers, ensuring a seamless and enjoyable experience.
• Booking a Taxi For Someone Else – Careem’s service also gives users the option to book a ride for someone else. This feature comes in handy when you want to arrange transportation for a friend or family member who may not have access to the app or has limited mobility. With just a few clicks, you can schedule and pay for a ride on behalf of someone else, making it easier for them to get from point A to point B.
• Captain Call Center – Careem also values its captains and recognizes their importance in providing top-notch service to our clients. That’s why they have a dedicated call center for captains, where they can reach out with any questions or concerns they may have. This support system ensures that our captains are well-informed and equipped to deliver the best possible experience for our passengers.

How Does Careem Generate Revenue?

Careem operates on a simple yet highly effective revenue model. The company charges a fixed commission fee for each ride booked through its platform. This commission is typically around 20% of the total fare paid by the passenger. In addition to this, Careem also earns revenue through advertising and partnership deals with various companies.

One of the key factors that has contributed to Careem’s success is its ability to continuously evolve and adapt its business model. The company started off as a ride-hailing app, but has since expanded into other services such as food delivery, package delivery, and even credit transfers through its digital wallet feature.

Cash Inflow and Outflow Between Careem Team and Captains

Careem operates on a cash-based system, meaning that all payments are made in cash at the end of each trip. This allows for easy and immediate payment to captains, which in turn helps with driver retention and satisfaction.

To further support its captains, Careem has also implemented a credit system where captains can take out an advance on their future earnings. This helps with any immediate financial needs that captains may have, and eliminates the need for them to rely on external loans or credit.

On the other hand, Careem’s main expenses include operational costs such as salaries, marketing, and maintenance of its fleet of vehicles. However, due to the company’s efficient use of technology and resources, it has been able to keep these costs under control and maintain a healthy profit margin.

The Thing Called Careem Rewards

Another aspect that sets Careem apart from its competitors is its loyalty program, called “Careem Rewards”. This program allows passengers to earn points for every ride they take and redeem them for various rewards such as free rides, discounts on partner services, and even airline miles.

In addition to providing benefits to passengers, Careem Rewards also plays a significant role in customer retention and loyalty. By offering attractive rewards and incentives, Careem encourages passengers to continue using its services instead of switching to a competitor.

What are Careem’s future plans?

Careem’s acquisition by Uber has opened up new avenues for expansion and growth, ushering in an era of limitless possibilities. With access to Uber’s vast resources and unparalleled expertise, Careem is poised to not only disrupt the market but also redefine the very concept of convenience in the Middle East.

Building upon its success in the transportation sector, Careem now envisions a future where it becomes a “super app” – a comprehensive platform catering to all the daily needs of its users. By seamlessly integrating various services like transportation, food delivery, and payments into a single, user-friendly interface, Careem aims to revolutionize the way people experience convenience and efficiency in their everyday lives.

Beyond transportation, Careem is actively exploring new frontiers, diversifying its offerings to include areas such as delivery, payments, and even food delivery. By venturing into these domains, Careem seeks to create an ecosystem that not only simplifies life for its users but also establishes itself as a trusted partner for all their needs.

With its unwavering commitment to innovation and customer satisfaction, Careem continues to chart a path of growth and evolution, transforming itself into a powerhouse of services that cater to the diverse needs of the Middle East. As the journey unfolds, Careem stands ready to shape the future of mobility and redefine the way people connect, explore, and experience the world around them.

Benefits of Careem Business Model:

• Convenience and efficiency: By integrating various services into a single platform, Careem offers users the convenience of accessing multiple services through one app, saving them valuable time and effort. Whether it’s booking a ride, ordering food, or scheduling a delivery, Careem’s all-in-one platform simplifies daily tasks and enhances the overall user experience.
• Competitive pricing: With the ability to provide diverse services, Careem is able to offer competitive pricing options tailored to meet the needs and budgets of its customers. By ensuring affordability without compromising on quality, Careem has positioned itself as an attractive and cost-effective choice in the market, giving users more value for their money.
• Job creation: As Careem continues to expand its services and operations, it plays a vital role in creating job opportunities for individuals across various sectors. From drivers to customer support representatives, Careem’s growth contributes to the development of local economies, providing employment opportunities and fostering economic stability in the region.
• Technological advancement: Careem’s business model relies heavily on embracing and leveraging technology. By staying at the forefront of technological advancements, Careem drives innovation and pushes boundaries to enhance user experience and streamline processes. From implementing advanced algorithms for efficient route planning to optimizing the app’s interface for seamless navigation, Careem’s commitment to technological advancement ensures that users have access to the latest and most user-friendly features.
• Positive impact on society: Careem’s provision of accessible and efficient transportation services has a positive impact on society. By offering reliable alternatives to private car ownership, Careem contributes to easing traffic congestion and reducing carbon emissions. Additionally, Careem’s commitment to safety and security ensures a safe and comfortable travel experience for users, promoting a sense of trust and well-being in the community.

With its focus on convenience, competitive pricing, job creation, technological advancement, and positive societal impact, Careem continues to redefine the way people travel and engage with services, making a lasting difference in the lives of individuals and communities alike.

How can iTechnolabs help you build an app like the Careem mobile application ?

iTechnolabs is a leading mobile app development company that specializes in designing and developing mobile applications for businesses of all sizes. With our team of highly skilled developers, designers, and project managers, we can help you build an app like the Careem mobile application that meets your unique business needs.

At iTechnolabs, we pride ourselves on using the latest technologies and best practices to deliver high-quality mobile applications that are user-friendly, secure, and scalable. Our team has extensive experience in developing apps for both iOS and Android platforms, ensuring that your app is accessible to a wide range of users.

• Define Your Goals and Objectives

At iTechnolabs, we start by thoroughly understanding your business needs and goals for your app. We conduct in-depth discussions to identify the specific outcomes you want to achieve. This helps us create a comprehensive roadmap that aligns with your vision and sets the foundation for a successful project.

• Design the User Interface

Our team of talented designers collaborates closely with you to craft a visually appealing and user-friendly interface for your app. We take into account your brand aesthetics, ensuring that the design reflects your unique identity. By prioritizing a seamless user experience, similar to the Careem app, we ensure that your users will have an intuitive and enjoyable interaction with your app.

• Develop the App

Next, our skilled developers utilize cutting-edge technologies to bring your app to life. With extensive experience in both iOS and Android platforms, they meticulously code and optimize your app for optimal performance on all devices. We pay attention to every detail, ensuring that your app runs smoothly and efficiently to provide a top-notch user experience.

• Testing

We believe in delivering nothing but excellence. Our dedicated team conducts rigorous testing to identify and address any bugs or issues before the official launch. Through comprehensive testing methodologies, we ensure that your app functions as expected and meets the highest quality standards. Our goal is to provide a flawless user experience from day one.

• Launch & Post-Launch Support

We stand by your side throughout the app launch process. Our team assists you in navigating the complexities of submitting your app to the respective app stores, ensuring a successful launch. But our support doesn’t end there; we continue to provide post-launch support, handling updates, maintenance, and implementing further enhancements to keep your app competitive and up-to-date.

Are you looking to build an app like Careem?

At iTechnolabs, we leverage cutting-edge technology to build super apps like Careem. Our team of seasoned developers and engineers employ advanced tools such as geo-location for real-time tracking, intuitive user interfaces for optimal user experience, and robust back-end systems for seamless operation. We use machine learning algorithms for optimized routing, fare estimation, and demand-supply balancing. These algorithms also play a crucial role in predictive analytics, helping to forecast user demand and streamline operations. By integrating advanced payment gateway systems, we ensure smooth and secure transaction processes, creating an app that is not just user-friendly, but also highly functional and secure. Our technology stack, inspired by the Careem business model, is designed to drive operational efficiency, enhance user engagement, and promote business growth.

1. Geo-Location for Real-Time Tracking: The first step in developing an app like Careem is integrating geo-location for real-time tracking. This feature allows users to track their ride in real-time and gives drivers turn-by-turn directions to their destination.

2. Intuitive User Interfaces: Next, intuitive user interfaces are designed for optimal user experience. This includes easy-to-navigate menus, clear and concise information displays, and straightforward booking processes.

3. Robust Back-End Systems: Our engineers then create robust back-end systems for seamless operation. These systems handle a multitude of tasks, from managing user data to processing transactions.

4. Machine Learning Algorithms: Machine learning algorithms are employed for optimized routing, fare estimation, and demand-supply balancing. These sophisticated algorithms also play a crucial role in predictive analytics, forecasting user demand to better manage resources and streamline operations.

5. Advanced Payment Gateway Systems: Finally, to ensure smooth and secure transactions, advanced payment gateway systems are integrated into the app. This provides users with a variety of payment options and ensures the secure handling of their financial information.

Conclusion:

The Careem business model has revolutionized the transportation industry in the Middle East. By leveraging technology and innovation, we have created a super app that meets the needs of both users and drivers. With features like real-time tracking, intuitive user interfaces, robust back-end systems, machine learning algorithms, and advanced payment gateway systems, our app provides a seamless experience for all parties involved.