Uber Faces Competition In Egypt As Local Startups Aim To Solve $8B Traffic Problem

Written by Peter Pedroncelli

U.S. ride-hailing company Uber is pushing for market share in Egypt, but a number of local and regional players are gaining ground within the country.

Traffic costs the country $8 billion per year, or 4 percent of its GDP, according to a study by the World Bank.

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This is a problem that Uber and other transport startups are eager to solve to become a dominant force in the country considered a gateway to the wider North African and Middle East region.

In Cairo alone, 23 million inhabitants and an overburdened public transport system have contributed to the gridlocked traffic, according to BusinessInsider.

More than 4 million daily commuters use the Cairo Metro, which is half the size of the Washington D.C. Metro and carries four times as many passengers per half-mile of track, the World Bank report reveals.

The public bus system in Cairo is also overburdened. Among the world’s major cities, Cairo has one of the lowest stats in terms of buses per million residents, the report reveals.

Traffic problem not just costly, but deadly

The traffic problem is not only expensive, but deadly. More than 1,000 people in Cairo die each year in traffic-related accidents, mostly pedestrians, while 4,000-plus are injured, according to the World Bank.

These have all been factors in the rise of ride-hailing and transport firms in the country.

FILE – In this Tuesday, May 5, 2015 file photo, rush hour traffic fills the 6 October bridge over the Nile River in Cairo, Egypt. Uber launched a new minibus service in 2018, in traffic-mad Cairo, Egypt’s capital and the ride-sharing U.S. giant’s fastest-growing market. (AP Photo/Hassan Ammar, File)

Egypt is one of Uber’s fastest growing markets, and in December 2018 the San Francisco-based tech company launched a new minibus service in Cairo, according to News24.

Uber hopes to draw millions of Egyptians into ride-sharing from chronically congested, pollution-filled urban landscapes and replace personal automobiles.

Regional transportation firm Careem, based in the U.A.E, launched a bus service in the Middle East and North African region at the same time as Uber, AlJazeera reported.

Their bus-booking service is scheduled to be expanded into Saudi Arabia and Pakistan, as Careem aims to beat Uber to regional dominance.

Startups such as Swvl, Buseet, Fyonka and Halan are also giving Uber stiff local competition.

Swvl is essentially a premium alternative to public transportation in the country, with startup’s most recent undisclosed funding round coming in November 2018.

The startup also plans to open a research and development facility in Germany, and has raised in the region of $8.5 million in funding, according to Crunchbase.

Another local bus startup is Buseet, which also raised capital in 2018, attracting an undisclosed amount from Cairo Angels and 500 Startups in September, Menabytes reported.

Halan is a low-cost, ride-hailing service featuring motorcycles and autorickshaws. The startup raised $4.3 million in Series A funding in December 2018, according to DigestAfrica.

Other companies have been created to avoid harassment issues and address concerns over safety for female passengers.

An example of this is Fyonka, a ride-hailing service connecting women drivers with women passengers, according to BusinessInsider.

Uber support center

Despite all of the interest and investment in local startups within the sector, Uber has been flexing its financial might in an effort to gain a stronger foothold in the market.

In 2017 Uber announced a new support center in Cairo and an investment of $20 million set to be spent on the project between 2017 and 2021, creating employment for 700 Egyptians as a result, according to Albawaba.