Will bike sharing pick up in the GCC, or is this concept incompatible with the region?
Careem is expanding its reach across the mobility spectrum
Careem is working to bring micro-mobility to more cities throughout the region over the next 12 months, and this latest acquisition, the value of which has not been disclosed, is part of this plan.
As such, the ride-hailing firm stated regarding acquiring startup Cyacle that bikeshare is a natural extension of its vision to improve mobility, sustainability, and affordability in the region.
Launched in December 2014, the newly-acquired Cyacle is a fully-automated docked bikeshare service currently operating in Abu Dhabi. Stations run 24-hours a day via an app, a touch screen kiosk and docking system that releases bikes using a ride code or a member key.
Users can rent bikes to drive from one Cyacle station to the other, making shorter trips in the Emirate cheaper and more convenient.
Reducing emissions and encouraging physical activity, the company has found success, reporting 72,434 registered users, 152,407 CO2 emissions displaced, and 27,642,037 Kcal burnt.
Under the Careem umbrella, the company will now rebrand, serving customers through a new Careem app.
However, the Cyacle acquisition is not Careem’s first attempt at dabbling with bikesharing.
Last month, Careem announced that it was partnering with the Roads and Transport Authority (RTA) to install 350 bike docking stations across the Emirates, where citizens will have access to 3,500 bicycles to bike share.
Will bikeshare find success in the UAE?
With Cyacle having given the UAE a taste of bikesharing, Careem must have realized the true potential of the concept.
After all, a January McKinsey report revealed that stakeholders have invested more than $5.7 billion in micro-mobility start-ups since 2015. McKinsey attributed this success to urban consumers. These city dwellers “already value and use solutions for shared mobility, such as car sharing, ridesharing, and e-hailing.”
However, while the concept of bikesharing has proven successful in countries like the US and China, where temperatures are relatively mild, the UAE and the greater gulf region have to contend with scorching temperatures. Kuwait, for example, is expected to witness recorded temperatures of 68 degrees Celsius this summer, as per an Arab Times report. Just yesterday, denizens of Kuwait had to endure a temperature of 63 degrees Celsius under an 11 am sun.
The UAE is no stranger to such summers either, and often has to contend with waves of humidity.
Besides taking the unforgiving Gulf weather into consideration, it’s worthy of note that bikeshare business models are notoriously unprofitable. Chinese bikeshare startups Ofo and Mobike learned this the hard way after a few years of operating in mobile-mobility’s largest market.
Mobike only survived when it was bought by a larger corporation that could brace the losses. Ofo wasn’t as fortunate, and it remains on the brink of bankruptcy. Many of those smaller Chinese bikeshare startups died out one after the other.
Ofo and Mobike utilized a dock-less approach to bike sharing, but this meant that bikes could be abandoned in hard-to-reach areas, or possibly even stolen, even if they had gps tracking. The dock-less model seems more enticing to users, but is ultimately less feasible for businesses.
The docked approach, which Cyacle adopts, is more limiting for consumers, but less of a hassle for its business. Given the UAE’s strict screening process for similar business models, like Careem or Uber’s, it makes sense why the docked approach has been chosen in the country.
Another angle to consider is the affordability factor. Whereas fuel is often expensive in countries like the US, or in the UK, it is quite affordable in the oil-rich gulf, meaning many would opt for a comfortable, air-conditioned automobile over a bike ride in the desert sun.
On the plus side, bikesharing could spare many travelers from getting stuck in traffic, as well as solve the first and last mile problem.
“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 micro-mobility solutions for short-distance trips,” Magnus Olsson, CXO and co-founder, said.
In a region known for sweltering heat, cheap cars, and low-cost fuel, Careem could have a tough time encouraging mass-usage of their newly acquired service. However, with the company about to stock up on $3.1 billion in Uber capital, the company could afford the risk. Perhaps, they’ll crack the code to bikesharing in a region not known for forgiving weather, or cash-strapped citizens.
For a company that made ride-hailing a home-bred phenomenon regionally, it might very well be possible.