CAIRO — A new type of ride-hailer that has taken over the streets of Cairo is rolling into Southeast Asia, a fiercely competitive market long dominated by local giants like Grab and Gojek.
Swvl, established in Egypt three years ago, offers shared rides on the startup’s minibuses, with an app providing a list of destinations and arrival times for vehicles nearby. Users can book a seat on the most convenient option for a fixed rate. Riders receive an alarm by smartphone when the bus nears their destination.
Swvl is 30% to 40% cheaper than regular bus rides in Kenya, where the company began operating in 2018.
The startup, now based in Dubai, aims to debut service in Indonesia, the Philippines and Bangladesh within the year. It already operates in Pakistan’s major cities, including Islamabad, Karachi and Lahore, and looks to invest another $25 million to expand in the country. The goal is to have 500,000 users by 2021.
Swvl has been aggressive in fundraising as well, drawing about $42 million from investors in Sweden, Dubai and China last year to fund its expansion in Africa. CEO Mostafa Kandil plans to launch the app in two or three new cities on the continent, including Lagos in Nigeria.
The service’s use of shared minibuses makes it cheaper than ride-hailing apps that employ cars. Despite Swvl often being pricier than public transit, its guaranteed seats make for a more comfortable ride than public buses, where passengers frequently are packed like sardines.
But the ride-hailer has run into some red tape. Swvl received a warning from a Pakistani regional government in November, though the company denies the allegations of operating without proper route permits.
The startup also has suspended service in Nairobi due to a clash with local authorities, who demand that the company operate its buses along a set route. In hopes of resuming operations quickly, Swvl appointed a former Uber Technologies manager to head its Kenya operations.
When ride-hailing companies enter a market, they often face a backlash from competing services such as taxis and buses that fear losing business. In some cases, industry groups lobby the government to force out the newcomer. How Swvl handles such pressure remains to be seen.
Kandil, who is in his late 20s, participated in a Google program for budding entrepreneurs during college. He studied petroleum engineering and worked briefly at an oil company, but he soon left the industry, feeling that it was too rigid for him.
Swvl moved its headquarters from Cairo to Dubai in November. This was partly to leverage Dubai’s status as an aviation hub, giving the company greater access to global business travelers. Dubai also offers a more developed startup ecosystem, with many investors who specialize in fledgling businesses.