It is clear that rumors of the Careem bus service, which had been planned for so long, have either been misunderstood or the company has had a recent shift of heart as the famous ride hailing service plans to enter the city’s transport business with its bus service instead of the intracity market.
Reports suggested that behind the decision of Careem not to enter the intracity market there are good reasons. Of course, one of the most critical is profit–or lack of income. Careem is not seemingly profitable enough to enter the intercity market at this time. Airlift and SWVL are already in an arduous rivalry. The average fare paid is not quite competitive as it is, so greater competition on the market would usually mean that the fare will remain that way –unless it falls lower.
In the intercity transport market, fares are high and the routes are simpler, and therefore, it makes more business sense to enter that market.
The intercity transport market has established players too (Daewoo, Skyways, etc.) but Careem seems more willing to take them on. Besides, Careem plans to compete on the quality of service and not on price in that particular market, anyway. It believes that compared to the other players there, their “smart buses” offer a much better service to the intercity commuters.
Another reason for not entering the intracity market is that there are concerns that Careem may end up cannibalising its own market share if they introduce the bus service there. After all, the consumer who now has the choice to take Airlift or SWVL for his daily commute is the same consumer who was once relying on Careem or Uber for the same purpose.