The growing customer base of the application-based car service, Careem, prompted the company to introduce a new pricing strategy on Thursday.
General Manager of Careem Egypt Hadeer Shalaby said in a statement the company is facing a challenge regarding the availability of cars to users during peak times “when demand for cars exceeds the available supply”.
As per the new strategy, the cost of the Careem service will increase during peak times. The company said this will help increase the supply of available cars in high-demand times and locations. The additional peak costs will be paid out fully to Careem drivers, “to encourage them to be available during peak times”.
Careem will notify users of the cost of the ride before taking it to ensure transparency. “We are adding more ‘Captains’ every day to our fleet to reduce our reliance on peak pricing during busy times and to ensure we will always offer you our best service at the best possible price,” Shalaby said. Careem however did not determine the peak hours.
Uber and Careem, both mobile application-based taxi services, allow users to order a car directly to their location using GPS. The applications even tell how long the driver will take to reach the location, as well as estimating the fare and arrival time.
Many passengers have decided to switch to Uber and Careem as an alternative to traditional Egyptian white taxis. The rising popularity of the services led to major protests by white taxi drivers last month.
Among the taxi drivers’ claims were that Uber and Careem drivers are working illegally since they not driving authorised taxis.
Careem started operating in Egypt in December 2014. Since the start of their operations, Careem obtained $1.7m from STC ventures and $10m from Al-Tayyar. It operates worldwide with a focus in Middle Eastern countries such as Jordan, Kuwait, Qatar, Bahrain, the UAE, Saudi Arabia, Lebanon, Morocco, and Pakistan.