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Middle Eastern ride-hailing app Careem is branching out into the fast-growing micromobility market by acquiring Cyacle, a United Arab Emirates-based bike rental service.
“Many journeys are relatively short in distance, including those to and from transportation hubs such as metro and bus stations, so increasing bicycle availability and expanding routes will transform how people commute, as well as offering micromobility solutions for short-distance trips,” said Careem co-founder Magnus Olsson.
Careem is already riding high after rival Uber agreed to buy it last month for $3.1 billion in a major acquisition for the Middle East. Neither Careem nor Cyacle would disclose the value of the deal.
The Cyacle acquisition, though, confirms that micromobility is a lucrative new frontier. But like any maturing arena, there are some bumps to watch out for along the way.
Investors worldwide have put more than $5.7 billion into the micromobility space since 2015, according to a January report by McKinsey. McKinsey attributed two main factors to micromobility’s attractiveness among customers. First, people are already used to ride-sharing or hailing apps. And second, this “intuitive mobility” improves people’s quality of life.
“Micromobility appears to make people happy — it’s faster than car-based trips in many situations, and users often say the freedom of being in the fresh air traveling to their destinations while avoiding traffic jams puts a smile on their face,” according to the report.
On the supply side, McKinsey noted that micromobility is also easier and faster to scale-up. A car-sharing company might take several years to become economically viable, while “an e-scooter could break even in less than four months,” McKinsey said.
A major obstacle to micromobility is the state of many cities, which have congestion problems and unimproved infrastructure.
That’s especially true in the Middle East, where many major cities such as Cairo are burdened by urban gridlock resulting from decades of population and automobile growth without accompanying government planning.
Careem acknowledged the problem, saying it will “work closely with local government and communities across the region to invest in bikeshare service in support of their micromobility goals.”
One further bump in the road to watch for as Careem ventures into microbility: over supply. In China, the rapid growth of the industry in recent years led to mounds of unused or discarded bicycles piling up.
Part of Cyacle’s success so far, according to The National journalist Kelsey Warner, is that it has strategically worked to increase visibility and ramp up rapidly, but not too fast, in order to avoid breaking the speed limit for demand.
Cyacle, which launched in 2014, is available as a standalone iOS and Android app, though it will soon be incorporated into the main Careem app. The bikes are available 24 hours a day via the app or at physical docks with credit and debit cards. Cyacle also offers daily to yearly memberships. Consumers use a riding code or a member key to unlock bikes through touchscreen kiosks and docking systems situated around Abu Dhabi.
Miriam Berger is a freelance journalist based in the Middle East.
