CAIRO — According to Emil Michael, Uber’s chief business officer, “the Egyptian market is the most important for Uber in the Middle East.” There are currently 50,000 drivers using the ride-sharing app in the country, and the company is poised to make further investments in the Egyptian market. Uber’s investment in Egypt highlights the economic opportunity for foreign companies in the country and the benefits of foreign investment for the local population.
In a recent interview with Daily News Egypt, Michael asserts that roughly 40 percent of the 50,000 drivers in Egypt were unemployed prior to joining the company. He predicts that the market will continue to grow, creating jobs for tens of thousands of Egyptians. Last year, Uber invested nearly $14 million in the Egyptian economy, and, according to The Economist, the company has plans to invest more than $50 million in Cairo alone in the future.
Michael is of Egyptian origin and has a personal desire to see the Egyptian market succeed through job creation for local people. According to The World Bank, one-third of young Egyptians are unemployed, up from one-fourth in 2010. Jobs with Uber, particularly for young people familiar with technology, provide a quick and flexible source of income for the country’s many unemployed.
Egypt’s economy relies on foreign aid. The country is one the top five recipients of U.S. aid, receiving roughly $1.5 billion in 2015, mostly in security-related military assistance. Any foreign direct investment from companies such as Uber is therefore critical in diversifying Egypt’s economy and reducing its reliance on foreign aid.
Uber’s launch in Egypt came after an arduous six-month licensing process, and the country still has not enacted a proper ride-sharing law. Egypt currently ranks 122 of 190 in the World Bank’s ease-of-doing-business index. Considering the potential job creation and boost to the economy companies like Uber provide, it is important for the Egyptian government to attract investment. On May 7, the Egyptian government passed an investment law that aims to encourage foreign investment in Egypt. The new law commits to reducing bureaucracy and provides tax incentives for businesses looking to invest in the country.
The Egyptian government is keen to show that Egypt is open to foreign businesses. Six months ago, as part of a $12 billion deal with the International Monetary Fund, the Egyptian pound was converted to a floating currency. Before this, the pound was artificially inflated relative to other currencies, discouraging foreign investment. Now that the currency is floating in the global market, Egypt is better prepared for increased foreign investment. According to Michael, the newly depreciated currency gives Uber’s investments more value and helps produce greater returns for the company.
Uber claims to benefit Egypt in other ways than job creation. According to Michael, Uber aids the Egyptian economy by easing traffic problems and reducing pollution in major urban centers, particularly Cairo. Cairo has levels of fine carcinogenic particles in the air seven times greater than the World Heath Organization’s guidelines deem safe. Every autumn, a “black cloud” of pollution descends on Cairo, so severe that it sometimes burns residents’ eyes and throats.
By convincing people to use their services and keep their cars parked, Uber is reducing the number of cars on the streets. An Uber driver averages 10 trips each shift, so the company’s presence could result in around 10 fewer cars on the road per driver per shift. In another measure to mitigate the effects of congestion and pollution in Cairo, Uber recently announced that it is partnering with NileTaxi, a river transport company operating on the Nile. UberBoat will be available at 10 docking stations along the Nile river and will operate daily from 8 a.m. to 10 p.m.
Uber’s expansion in Egypt has provided quick and accessible jobs in a difficult economic climate. New drivers are joining at a rate of 2,000 a week, and Uber’s success in the country shows shows signs of gaining speed. This investment in Egypt also demonstrates the potential for other innovative technology firms in the country.
– Michael Farquharson