Urban Mobility Part II: Improving Commutes with Bike-Sharing in the Desert
Abu Dhabi-born Cyacle launched the first bike-sharing solution in the Middle East. The team's ability to understand and collaborate with their customers led to their success.
Sandbox is a product-centric view of how technology companies are built in emerging ecosystems. This week we’re continuing to explore micromobility in the Middle East through the lens of a homegrown bike-sharing program.
Welcome back to Sandbox! If you're just now joining us, we're continuing the journey in this two-part series on urban mobility in the Middle East. To understand the solutions, I'd invite you to read Part I, which discusses the challenges commuters, communities, and governments face in markets like Cairo, Dubai, and Riyadh.
Today we're talking about Careem Bikes, formerly known as Cyacle. I must disclose up front: I'm ex-Careem myself and worked closely on the acquisition and integration of Cyacle and the launch of Careem Bikes. In true startup fashion, I was also physically put to work moving bikes and had a brief (albeit memorable) stint as the model of Careem Bike’s marketing campaign in the UAE. I’m still teased for it today. Thanks team.
The reality of Careem Bike is that it, like many solutions in its region, is tech-enabled versus product-led. It's an operational business at its core, one that is scaled quite beautifully using a customer-facing app and custom internal tool built to manage business operations. Operational heaviness aside, it is a solution solving a significant problem while smartly leveraging technology.
The Problem
Since some of us have the attention span of a goldfish (myself included), I'll use some of my precious page space to remind you of urban mobility challenges. The graphic below summarizes the challenges commuters face in Middle Eastern and North African (MENA) cities.
Last week we teased micromobility, using lightweight vehicles such as bicycles or scooters, as the solution to the problem. I'll use this week's newsletter to deep-dive into the Careem Bike product - both physical and digital aspects. Given the product’s current scope, I will limit the discussion to the United Arab Emirates’ market.
The Solution: Bikes on a Desert Island
Founded in 2013, Cyacle was the trailblazer of technology-supported micromobility in the Middle East. The founders, both casual cyclists, recognized that replacing short car trips with light vehicles could address the earlier highlighted problems in urban mobility for the region. At a macro-level, they were also motivated by the long-term benefits of micromobility adoption: less traffic, less pollution, and healthier residents.
The founders, German-born Sami Amin (now Senior Director at Careem) and Abu Dhabi native Hani Akasha drew their inspiration from Europe's cycling culture. Specifically, London's Santander bike-sharing program encouraged Hani and Sami to bring a similar solution to the United Arab Emirates. By providing round-the-clock access to an affordable bicycles, they could ensure customers would have accessible and reliable transportation.
Cyacle officially launched its bike-sharing solution on Yas Island in the Emirati city of Abu Dhabi with 11 stations and 75 bikes. MENA's first bike-sharing program offered the small island's tourist-skewed population a way to move between hotels, retail shops, and a theme park. Cyacle's value proposition earned them a pre-launch sponsorship from Abu Dhabi Commercial Bank (ADCB).
In 2019, Middle East mobility leader and technology platform Careem acquired Cyacle to serve first and last-mile trips in the region, the initial and final legs of a commute. Careem Bike officially launched in early 2020 with 80 stations and 800 bikes across Dubai. Today, the platform serves thousands of customers daily across the United Arab Emirates with its subscription model and electric pedal-assisted bicycles.
Cyacle’s Early Customer Discovery
When Hani and Sami observed a bike shop in one beachside area of Abu Dhabi renting shoddy bikes offline for over $10 per hour, they knew they were on the right track. To validate their hypothesis, they conducted a market study in 2013 before launching, surveying approximately 400 Abu Dhabi residents on their awareness and anticipated usage of bike-sharing. The analysis was rudimentary, but there were a few interesting data points. Bear in mind this is Abu Dhabi in 2013:
Only 37% of respondents were aware of the existence of bike-sharing programs globally, of which only 33% had ever used one
64% of respondents replied that their motivation was fitness, while 42% were motivated to use bikes as a commuting solution
36% of respondents anticipated using the program throughout the year (even during hotter summer months)
Customers
Bike-sharing today is ubiquitous, and the product itself isn’t overly complex, but there are unique customer attributes and behaviors in different markets. When it comes to the Middle East market, there are three customers: consumers, governments, and the private sector.
Users
The founders' original target customer persona was someone in good health who was looking for cost-effective access to a destination under five kilometers or recreational trips. There are 3.4 million residents in Dubai and 1.5 million in Abu Dhabi. It's challenging to find accurate demographics at the city level, however, figures at the national level show that expats make up 85-90% of the population.
Given the residents’ inexperience with using technology-enabled bike-sharing, creating demand for Cyacle required community building and education. Cyacle donated bicycles to a local women's club, where a prominent local leader encouraged their use. They also partnered with wellness events throughout the year to build a profile and offered free trips every Ramadan.
The team shared a few surprising examples of customer behavior over their years:
the CMO of an international bank, who used Cyacle every day in Abu Dhabi because he loved the solution and believed in the mission
Delivery riders who use Careem Bike for last-mile delivery (I've also seen this with Lime bikes in London) and can increase efficiency, up to 50 trips/day
People using Careem Bike to cycle around a 25km and 50km recreational track in the desert of Dubai
Governments
Policy and regulation touch every single form of mobility. Policymakers are just as much customers and stakeholders in the success of micromobility solutions as the customers. I'd argue that they're even moreso the customer than the riders themselves. This is especially true of the Middle East and many other emerging and frontier markets where infrastructure lags behind developed nations, either in quality or form.
Although regulation can sometimes slow a company’s growth to the pace of molasses, it can also act as a moat. The founders credit the support of the Abu Dhabi municipality with approvals for stations and investment in bike paths for Cyacle's early success. Later, Careem Bike signed an exclusive partnership with Dubai's Roads and Transport Authority (RTA) for the Middle East's first large-scale bike-sharing partnership between a government and the private sector. The Dubai government has invested in 527 kilometers of bicycle paths across the city to support the initiative.
Private Sector
The third customer is the private sector. In the markets of the Arabian Gulf, this takes two forms: property developers and sponsors.
Property developers in the GCC (Gulf Cooperation Council) build offices, theme parks, malls, and retail shops; these are all physical locations central to much of GCC life. Cyacle's first private sector customer was Aldar Properties, the developer behind Yas Island in Abu Dhabi, where Cyacle launched.
Sponsorship is also essential to the financial sustainability of bike-sharing programs. There's a reason that every major scheme globally has corporate sponsors.
Solving Urban Mobility at Scale
Turning back to the product itself, I’d like to focus on how to build a sustainable solution that highlights the problems discussed. Adequate urban mobility requires multi-modal transport, and municipalities should design networks as such.
Behold, the Pastel Pyramid of Urban Mobility Prioritization:
The logic here is straightforward, but let us take a moment to show some respect for our feet. For the same reason that bicycles are the driving force behind public transport utilization, walking is a necessity for micromobility users. All forms of transport, including micromobility, are built on the premise that you can reach your starting point by foot. It's the first step (pun intended) in any journey or commute. Bicycles go on to serve as the bridge between walking and all other forms of public transport. Like sugars in the traditional food pyramid, cars sit at the top, and should be used sparingly.
A successful docked bike-sharing program also requires station density. A 2015 study by the National Association of City Transit Officials (NACTO) demonstrated, unsurprisingly, that bike share use increases exponentially with station density. The study found that the optimal density is 28 stations per square mile. This is double Dubai's current station density, and the station location selection must be data-driven.
Multi-modal transport systems must be enabled by technology. Global examples include Uber’s app, which allows you to purchase ferry and Eurostar train tickets in the United Kingdom, as well as Citymapper, which offers multi-model journey planning for most European and US cities (including micromobility solutions like Lime and Santander bike).
Braking on Scooters
I get this question quite a bit, so I want to give it some airtime: what about scooters? Scooters are great fun, but my humble take is that bicycles are a more suitable solution for most Middle Eastern cities. For starters, scooters are generally used for shorter journeys. I've seen varying statistics, but I would classify them as ideal for sub-three-kilometer trips. In addition, the short distance leaves the commuter holding the bag on cost; in some cases, scooter trips cost the same as a taxi for the same distance. Also, the smaller wheels and higher center of gravity make them less ideal for urban use outside of the developed road infrastructure of the GCC or private developments in Egypt.
Scooters have also been labeled as unsafe, and as expected, I found studies with conflicting conclusions when researching this. However, I once witnessed two twenty-something gentlemen of the highest order riding down a hill on an escooter in Lisbon with a case of beer between their feet. The ability to do things like this could skew the statistics.
The numbers also show consumers actually prefer bicycles for commuting:
Product Challenges & Learnings
Even as someone intimately familiar with the solution, my conversations with Sami and Hani were quite insightful as they offered helpful learnings from their journey building Cyacle.
Four points from our respective conversations stood out:
Firstly, urban mobility should be viewed through the lens of the above pyramid hierarchy and built bottom-up. Micromobility solutions must first solve for activating short-distance movement and livability within each community in a given city. To illustrate, let's use last week's example of the Jumeirah Lake Towers (JLT) area in Dubai, a 3.5km stretch of land. There are over 60,000 residents, 21,000 registered businesses, and two metro stations. This community has incredible potential for livability. Building micromobility solutions solves the problems highlighted but also encourages social and commercial life in JLT by reducing the friction and cost of movement. The next step is activating other communities across the city and similarly enhancing their liveability. After activating the communities, the public and private sectors must work together to encourage public transport ridership and build a truly connected city. From a product perspective, this underlines the ability or necessity of behavioral design to nudge individuals to create habits and build an affinity for a feature before fully scaling the solution.
Secondly, regulation and policymaking will touch even the most basic of business models; building the solution is only half the battle. Working with regulators is not simply asking for permission to launch— it's asking for ongoing financial and policy support. The requisite for regulatory prowess and a willingness to partner with regulators is especially the case for mobility. Still, this point holds for nearly any vertical you can think of: FinTech, ClimateTech, hardware, you name it.
Thirdly, educating customers in the UAE has been a challenge for the team. Product pricing queries are the plat du jour for customer care agents nearly every day since the model uses subscription pricing. Even after years of operation at scale, customers often need clarification on the free 45 minutes of trip time included in every trip and the overage charges. Unfortunately, this is a characteristic of new product users and emerging markets where digital is not the default. If the mantra of American consumers is "there's an app for that," emerging and frontier markets would live by the saying "there's a guy for that." Migrating to the former requires building new relationships, trust, and awareness for customers around digital products.
Finally, as part of the Careem team that acquired Cyacle, we validated our view that micromobility solutions must be part of a larger multi-modal transportation platform or SuperApp to scale. The value to the customer is significantly greater— both financially and as it relates to the customer experience. There are numerous examples of this globally, but Grab in Southeast Asia is the gold standard for emerging markets. The company offers self-branded scooters and in-app access to micromobility partners oBike, GBikes, Anywheel, and Popscoot.
Wrapping-Up
Rather than use this week’s newsletter to deep dive on a technical product, I started with one that is emblematic of emerging and frontier markets: a product that requires customer education, government collaboration, and technology adoption. And, as with any product, tech or otherwise, much of the learning comes from the customers.
Today, biking culture has taken the UAE by storm, and the public and private sectors have thrown their weight behind the solution. Bicycles are not novel, but Cyacle used technology to make a solution available since the early 1800s accessible and affordable enough for daily commutes.
Most importantly, Cyacle and Careem Bike demonstrate the need for the private sector to work closely with the public sector to solve for local problems like traffic congestion and global ones such as pollution and CO2 emissions. These problems can not be solved without micromobility, especially bikes, but bike-sharing programs can not survive without regulatory support and infrastructure investment.
As Middle Eastern urban populations grow and pollution worsens, we’ll undoubtedly see commuters and governments increasingly turning to micromobility for relief. Cities will need more micromobility solutions from the private sector, infrastructure support from governments, and the technology to offer commuters multi-modal journey planning that integrates seamlessly with public transport.
Appendix Note: Why Economists Hate Micromobility
I came across this interesting data point during my research and felt obliged to mention it. Not to be recursive, but one of the problems with micromobility is… well… micromobility. It solves such a wide range of issues that sometimes, at scale, it can impede economic growth. There's a misalignment of incentives between users, the private sector, and economists.
I’m looking for something more substantive on the topic so if you’ve come across this argument before, please share!
