Ride-hailing firm Uber has promised to invest on “an indefinite basis” in the Middle East and North Africa, following its recent exits from a number of Asian territories.
Speaking in an interview with the CNBC television channel, broadcast on April 26, the firm’s chief operating officer Barney Harford said the company planned to “double down investments” in key growth markets.
The company, which is planning to list its shares on a stock market in late 2019, sold its operations in China to Didi in 2016 and recently also agreed to exit a string of southeast Asian markets. Following that retrenchment, Uber now appears to be refocusing its efforts on other international markets. “We now have resources available that are allowing us to double down in critical competitive markets, in particular India and the Middle East [and] North Africa,” said Harford.
Uber chief operating officer Barney Harford at an event in New Dehli, India on April 18, 2018 (Photo: Vipin Kumar/Hindustan Times via Getty Images)
That strategy might see the company try and acquire competitors, including its most prominent rival in the Gulf region, UAE-based Careem. Harford indicated Uber might be open to the idea of buying a majority stake in the company. “Going forward we have no interest in doing transactions for minority stakes,” he said, but added. “It would be crazy for us as a hyper-growth company to not engage in conversations about potential partnerships.”
Careem says it operates in more than 90 cities across 13 Middle East countries, meaning it has far greater reach than Uber in the region. There are some prominent gaps in Uber’s coverage, including the UAE capital Abu Dhabi, where a range of local taxi companies dominate the market. Harford would not be drawn on whether that situation might change any time soon, saying “We continue to have conversations with different cities, with different states about opportunities to enter.”
Although the company lost $4.5bn on revenues of $7.5bn last year, Harford says it is profitable in some markets and does not plan to cut back on investments. “We are able to use the profits from those markets to allow us to invest on an indefinite basis in key growth markets such as the Middle East and North Africa where we’ve announced plans to double down investments.”
One critical – and fast-changing – market in the region is Saudi Arabia. The Saudi government is among the investors in Uber, via the Public Investment Fund, which took a $3.5bn stake in June 2016.