Careem Business Model & Company Evolution

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Technological growth has resulted in the emergence of novel business models. Today, people use technology to do almost all businesses. For instance, it is easy for one to purchase products or services online. Technology has made it easy for people to order goods or services from the comfort of their homes or offices (Boons et al. 4). One reason many enterprises are turning to technology is that it is cheap. Besides, technology helps businesses to reach a broad customer base.

As the population of millennials continues to increase, companies will be forced to embrace technology. It will be hard for enterprises to do business with this technical-savvy population without embracing technology. One of the companies with innovative business models is Careem. Careem is an international company that offers transport services (Chalfoun par. 2). The company has a network of cabs. Careem uses technology to run its business. The company has an application that enables customers to hire a taxi online. The application allows clients to request for instant or afterward planned pick-ups. The application is accessible through mobile phones.

Currently, Careem offers transport services in at least ten countries. Besides, the company is present in twenty-five cities across the globe. The company anticipates venturing into other markets as well as diversifying its products. This report will discuss the evolution of Careem, its leadership, and the products its offers. Additionally, the paper will discuss how Careem’s business model is unique, the company’s stakeholders, and its competitive advantages. The report will culminate by presenting the company’s value to stakeholders, revenue generation, and future growth.


Magnus Olsson and Mudassir Sheikha started Careem with an objective to resolve transportation problems in Dubai. At the time of inception, corporate travelers had challenges in hiring cabs. Magnus and Mudassir were frequent travelers when they worked at McKinsey & Company. The problem of hiring cabs made them think of establishing a car booking company (King par. 2). They never thought that the firm would grow into what it is today.

Careem started as a website-based company that served corporations. Later, the company evolved into an app-based entity due to increasing demand. The company ceased only to focus on corporate employees. It began to target all clients that were in need of car hire. The need to scale the business up led to Olsson and Sheikha looking for potential investors. The aspiration to venture into Egyptian and Pakistani markets resulted in Olsson and Sheikha bringing in Abraaj (King par. 5). Abraaj had experience in the Pakistani and Egyptian markets, and Careem sought to exploit their knowledge of the markets to its advantage.

In 2014, Careem merged with Enwani as a strategy to boost its services. Enwani was renowned for the development of city maps. Thus, the two companies combined their technological experiences for the shared goal of resolving transportation challenges. Careem continues to evolve based on changes in the market (King par. 7). Currently, the company targets even children. The company offers ‘Careem Kids’ services that are exclusively for children. Additionally, the company has entered into a partnership with airline companies such as Miles Air and Etihad Airways.


Magnus and Mudassir were the brains behind Careem. Before the establishment of Careem, Magnus worked at McKinsey & Company as an engagement manager. He served in a team of high-tech specialists that was responsible for advising customers worldwide on strategy and business building. Magnus started his first company when he was fifteen years old. It was an information technology (IT) consultancy firm that served small and medium enterprises (MacBride par. 4).

On the other hand, Mudassir worked at McKinsey & Company as an associate partner before he moved out to establish Careem. Mudassir worked as an advisor. He counseled customers on strategy and business building. Before joining McKinsey & Company, Mudassir had been employed in Silicon Valley (MacBride par. 6). He contributed to the establishment of DeviceAnywhere: a technology establishment that was later assimilated by Keynote Systems. Mudassir studied Economics and Computer Science at Stanford and the University of Southern California.

The inception of Careem came as a result of the desire to venture into entrepreneurship by the co-founders (MacBride par. 7). Magnus and Mudassir experienced entrepreneurial itch. Magnus had just recovered from brain surgery. He had suffered a brain aneurysm. After recovery, he wanted to engage in something that would assist him to discover his purpose in life. Conversely, Mudassir had served as a consultant for a long time. He wanted to change his career and venture into something meaningful (MacBride par. 7). The two came together and decided to engage in something that would assist to resolve a current challenge. As they had encountered difficulties in traveling to the cities, they decided to establish Careem to address the issues.


Magnus and Mudassir set Careem with an objective to transform road transportation in the United Arab Emirates. The company offers chauffeur-driven car services. The services are reliable and serve as substitutes for other means of transport. Careem’s brand value is the provision of secure and expedient road transport services (MacBride par. 9). The company offers services that suit the needs of individual clients. Customers have an opportunity to select a cab or vehicle pick-ups depending on the kind of service they require and the number of clients. The company serves customers who go for business meetings, family outings, airport pick-ups, and leisure.

All cars are connected to a global positioning system (GPS). It enables customers to track their vehicles. Besides, the GPS enable cab drivers (‘captains’) to locate clients and maneuver around the cities (MacBride par. 10). Presently, Careem has expanded its services to serve the children. The company has cars fitted with seats meant for children. Besides, the company offers ‘Careem Click’, a service that rewards patrons who hire cars for other people (MacBride par. 10).

Besides providing transport services to travelers, Careem also provides logistic services. The leadership of Careem understands that there are immense opportunities in the transportation industry. Consequently, they are out to expand market coverage by introducing novel services. Careem proved that it could offer logistic services when it distributed Christmas trees in Dubai (Chalfoun par. 4). Currently, the company is helping e-commerce businesses to collect money from customers. Most e-commerce enterprises use Careem’s cars and captains to gather money from clients who purchase products online. The company also offers services in documents and food delivery.

Business Model

Careem’s business model is unique in many ways. A majority of the customers in the Middle East have limited knowledge of technology. Consequently, apart from using applications to book cars, Careem’s clients can do it through a call center. The company has a call center with a unique number that any customer can easily dial and book a car. The company also offers different modes of payment. Customers from areas that do not support credit card can pay by cash.

Consequently, the company’s business model covers all kinds of customers. Besides, Careem’s payment model helps to ensure that chauffeurs have adequate working capital. Captains do not have to remit the money they get from customers to the company (Thomas par. 3). Instead, they use part of the money to pay themselves and the rest to run the services. At the end of the month, the company pays the chauffeurs the remaining balance.

Careem has a private location database. A majority of the cab companies like Uber rely on Google Maps. However, Careem has created its maps for easy maneuvers around the cities. In most cases, Google Maps are unreliable as routes keep on changing with the construction of new roads. Thus, Careem has its pick-up locations that facilitate the delivery of quality services (Thomas par. 5). The company allows individuals to book cars for their friends, bosses, or even kids. The company realized that most business-to-business bookings entailed secretaries hiring cabs for their managers. Thus, the company had to make sure that its applications accommodate a third party booking.


Careem is a technological firm whose chief financiers are local investors (Thomas par. 5). Numerous companies have invested in Careem. They include Arzan Venture Capital, STC Ventures, Al Tayyar, and Impulse among others. Besides the investors, other stakeholders include the co-founders and employees. The employees include call center staff, cab drivers, and managers among others. The captains are critical stakeholders for the company. They ensure that Careem offers efficient services. Without them, it would be hard for the company to serve its customers. The company allows all employees to own shares (Thomas par. 6).

The co-founders claim that everyone that the enterprise affects is a partner in the venture. The success of the company depends on a concerted effort amid the employees, investors, and customers. Careem deals with diverse groups of clients who are key stakeholders. They include corporate and small and medium enterprises. Magnus and Mudassir established Careem with the aim of targeting corporate staff. Corporate remain as major stakeholders to the company.

Other interested parties include individual customers and families. Careem offers transportation services to many families that seek to go for outings (Thomas par. 7). Without families, the company cannot realize its current profit margin. The demand for convenient transport services by individuals led to Careem expanding its services to target different clients. Many people seek Careem’s transportation services when they want to go out for leisure or to meet friends. Thus, individuals who rent cars for daily use forms a critical component of Careem’s stakeholders. Careem works in partnership with airline companies like Etihad Airways (King par. 3). They too are important stakeholders in the enterprise. They help the company to serve customers who need transportation services to and from the airport.

Porter’s Five Forces

Porter’s five forces can contribute to projecting the future of Careem. Careem is gradually dominating the car hire business in the Middle East. Nonetheless, the company faces the threat of new entrants. Careem is not protected from new entrants (King par. 6). Thus, the company is likely to lose a significant market share if another company emerges and offers better services. On the other hand, Careem has insignificant bargaining power over suppliers.

The company does not own cars. Thus, its business model is dependent on partners and drivers. The company outsources assets and workforce making it hard for Careem to control its operations (MacBride par. 11). Careem does not have full control of its operations. Thus, suppliers have a significant impact on its performance.

Careem has limited bargaining power over buyers. Clients are not obliged to use Careem’s services. Indeed, most customers seek Careem’s services on special occasions. They can seek services from other companies like Uber (MacBride par. 8). Besides, the United Arab Emirates has a well-established transport system. Thus, customers can use other modes of transport like taxis and trains. Lucrative businesses never lack substitutes (Kumar, Dass, and Kumar 473). Careem faces an immense threat of substitutes. In the Middle East, Taxi services serve as a significant alternative to car hire business.

The presence of numerous taxi companies in the Middle East makes it hard for Careem to increase the cost of its services. Rivalry amid Careem and other competitors like Uber is high. Careem uses a business model that is almost akin to that of Uber (Chalfoun par. 7). Thus, Uber and Careem compete for market share. The only advantage that Careem enjoys is its extensive market coverage. Besides, the company has invested in differentiation strategies making it stand out in the market. As a result, rivalry with competitors is a weak force due to Careem’s dominance.

Value to Stakeholders

Careem adds value to different stakeholders. They include customers and employees. Careem assists customers to meet transportation needs when they urgently require them (King par. 5). The company does not only offer efficient transportation services but also guarantees the safety of customers as they travel. Careem has an application that enables customers and the company to track the cars, thus ensuring that clients are safe. Besides, its location maps ensure that drivers pick and drop customers in the right destinations without delay. Careem values its employees. As a result, the company commits to employee development (King par. 7).

The current level of competition in the transport industry makes it difficult for a company to recruit and retain skilled workers. The company takes its employees through rigorous training to equip them with requisite skills. Additionally, Careem understands that employees contribute to the success of the enterprise. As a result, the leadership of Careem makes sure that employees also enjoy the company’s success. All staff members have a chance to buy shares from the company, thus earning dividends (King par. 7). In other words, employee benefits from Careem in the form of remuneration and career growth.

Careem creates value for its co-founders and other investors. When people invest in a particular project, they hope to make a profit in the future. An investment that does not have returns is of no significance to the investors. The leadership of Careem and other investors continue to invest in the company (El Mourad par. 3). It indicates that the company adds value to the investors. The company makes a significant profit that benefits investors. Besides the financial returns, Careem’s stakeholders also benefit from intangible benefits like satisfaction. Magnus and Mudassir established Careem with an aim to resolve an existing problem. The two feel contented to know that the company helps them to realize the dream.

Revenue Stream and Growth

Careem has numerous sources of income. The primary revenue stream comprises the corporations. The company offers transportation services to corporate staff who serve as its principal customers. A significant share of the business’s income hails from the corporate workers (El Mourad par. 5). Another revenue stream for Careem is private customers. Many people seek private car hire services for different reasons.

The company offers transport services to families and individuals who travel for leisure. Logistic services are proving to be another significant revenue stream for Careem (Thomas par. 7). The company has ventured into the logistics industry. Careem assists enterprises and individuals to ship goods from one location to another. Careem has come up with new revenue streams. The company works with e-commerce entrepreneurs. Careem assists the entrepreneurs to collect money from customers who purchase products online.

Currently, Careem dominates the ride-hailing business in the Middle East. The company has establishments in Egypt, Pakistan, and the Middle East. The company co-founders believe that Careem’s profit will rise significantly by 2018 (El Mourad par. 7). The company is in the process of opening new branches in North African countries and Oman. Currently, the company records a 30% growth monthly. Careem has over 300,000 customers across the Middle East. Besides, the company has at least 6,000 cars. Careem is expected to grow significantly in Saudi Arabia due to the increasing demand for transport services (El Mourad par. 8).

The company’s robust technology enables it to overcome challenges in the transportation industry, thus witnessing significant growth. Careem has focused on the consolidation of the current market. However, the co-founders claim that the company might partner with other taxi businesses in the future to increase market coverage.


Careem is an international ride-hailing company that operates in the Middle East. The company is renowned for offering superior transportation services that are tailored to the needs of individual clients. Initially, the company targeted corporate employees. Later, Careem expanded its services to cover individuals and small and medium enterprises. Currently, the company offers transportation services to families, company workers, and business people.

Besides, the company has invested in the logistics business. Careem works with e-commerce companies to facilitate the collection of money from customers. The company has a unique business model. The business model enables it to offer impeccable services to customers. The company’s stakeholders include investors, customers, and employees. The transportation industry is not regulated. Thus, Careem faces the threat of new entrants into the market. The company has insignificant bargaining power over suppliers. Furthermore, the presence of numerous modes of transport leads to Careem having little bargaining power over buyers. Careem faces an immense threat from substitutes like trains and taxis. Besides, there is a stiff rivalry between Careem and companies such as Uber.

Careem adds tangible and intangible values to stakeholders. The company serves as a source of income for investors and employees. Additionally, employees benefit from career development. The customers benefit from the company’s quality services. Careem guarantees that the clients reach their destinations without delay. On the other hand, the co-founders feel contented to realize that Careem helps them to address the transportation challenge. Careem derives revenue from various streams. The company generates revenue through the provision of transportation services to corporate employees. Moreover, the company offers logistics services. Careem assists e-commerce enterprises to collect money from customers for a fee.

Works Cited

Boons, Frank, Carlos Montalvo, Jacob Quist and Marcus Wagner. “Sustainable Innovation, Business Models and Economic Performance: An Overview.” Journal of Cleaner Production 45.1 (2013): 1-8. Print.

Chalfoun, Romeo. Careem Now Brings Taxis on Demand to Saudi Arabia. 2015. Web.

El Mourad, Hana. The Next Careem You Call Might Not have a Driver. No, Seriously!: Self-Driving Electric Pods is What Careem is Bringing to the Region. 2016. Web.

King, Neil. In the Driving Seat: Careem. 2015. Web.

Kumar, Piyush, Mayukh Dass and Shivina Kumar. “From Competitive Advantage to Nodal Advantage: Ecosystem Structure and the New Five Forces that Affect Prosperity.” Business Horizons 58.4 (2015): 469-481. Print.

MacBride, Elizabeth. How a Startup from the Middle East is Beating Uber, and its Lofty Ambition for the Future. 2016. Web.

Thomas, Sam. Careem: It’s Full Speed Ahead for this Middle East Startup. 2016. Web.

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