The rideshare industry in the Middle East and North Africa (MENA) region is set for substantial growth. Revenue will increase from $3.2 billion in 2024 to $4.2 billion by 2028, figures from Statista suggest. But MENA rideshare organizations may need to overcome some compliance and safety challenges that may otherwise harm both people and profitability.
This insight explores the drivers of growth in the MENA ridesharing industry, identifies the risks and looks to practical ways ridesharing organizations can swerve the potential pitfalls. Specifically, we consider:
What’s driving MENA’s ridesharing industry growth?
MENA ride-hailing market revenue grew at a compound annual growth rate (CAGR) of 16.9% between 2020 to 2024 from $1.7 billion in 2020, according to Statista. Projected growth, reaching $4.2 billion by 2028 from $3.2 billion in 2024, represents a CAGR of 7.1% between 2024–28.
$4.2B Projected growth by 2028
The same research points to ride-hailing services like Careem and Uber experiencing rapid growth, with Saudi Arabia leading the way as the largest market. As well as the entry of global players, local ride-hailing companies are emerging. In some places throughout the region, this is prompting competition, resulting in competitive pricing and innovations designed to attract and retain customers.
A young, tech-savvy population, increased urbanization and a surge in smartphone penetration are all driving the growth of ridesharing in MENA. Ease of booking, cashless transactions and transparent pricing models are particularly appealing in a region with a high youth demographic, with almost 140 million young people aged 10-24 years comprising a quarter of MENA’s population, according to UNICEF.
140M young people aged 10-24 make up a quarter of MENA's population
The investment climate in the MENA rideshare market is buoyant. Notable investments include Careem’s $400 million funding from e&, underscoring investor confidence. There are also government initiatives aimed at promoting entrepreneurship and supporting the digital economy, creating a more conducive environment for rideshare companies. Such drives include the likes of Call from Rabat, a joint declaration in favor of entrepreneurship, support for very small, small and medium-sized enterprises (MSMEs) and inclusive government policies for greater job creation.
How are partnerships boosting MENA ridesharing sustainability and profitability?
Rideshare companies in MENA are increasingly focusing on green mobility. Strategic partnerships, such as the collaboration between Al-Futtaim and Uber, are focused on accelerating the adoption of electric vehicles and enhancing sustainable urban transport solutions.
Rideshare companies in MENA are already diversifying their service offerings to include food delivery, grocery delivery and other on-demand services. This expansion is driven by the super-app trend, with companies like Careem evolving to become ‘the everything app.’ By integrating multiple services into a single platform, rideshare companies aren’t only increasing their market share but also enhancing user engagement and retention.
What regulatory challenges does the ridesharing industry in MENA face?
The regulatory challenges facing the rideshare industry in the MENA region are significant and vary widely across countries. The blurring of sectoral boundaries by super apps makes regulatory oversight potentially more challenging, as these apps don’t fit neatly into existing regulatory categories. Rideshare organizations in MENA may therefore benefit from partnering with specialists immersed in local regulation and market dynamics, while also being able to tap into multi-disciplinary expertise globally.
How can integrated insurance offerings support revenue for MENA ridesharing organizations?
As the MENA rideshare industry continues to grow against the backdrop of potentially complex compliance requirements, this may open gaps in protection. By finding ways to plug these gaps, ridesharing organizations can provide greater assurance for drivers, passengers and investors.
To ensure your insurance coverage addresses the industry-specific risks and supports the safety and confidence of all parties involved in ride-hailing, you can look to customized insurance solutions. More tailored coverage could include accidental death, permanent disabilities, medical expenses, personal liability and roadside assistance.
In addition to supporting safety and compliance, integrating these insurance offerings into your core services may create additional revenue streams and support profitability, particularly if you’re in a position to negotiate competitive rates with insurers and reinsurers.
How can MENA ridesharing organizations optimize profitability into the future?
Looking ahead, rideshare organizations in MENA should be ready to harness data to support growth and profitability. Being able to easily capture and analyze real-time data opens the door on optimizing your insurance offerings, adjusting pricing and improving service delivery.
Data can reveal patterns around claims and losses, supporting increased profitability and improved risk management. To achieve these benefits, you may need to invest in technology-driven insurance solutions able to easily integrate with existing platforms.
Such strategic investments, together with a focus on sustainable practices and diversification into new service areas are all likely to define the success of MENA rideshare platforms in the coming years. Likewise, the ability to navigate a complex regulatory backdrop and close gaps in protection may put fast-growing MENA ridesharing companies on a surer footing for continued growth.
To better understand the potential opportunities for rideshare companies and how you might boost profitability for current operations in the MENA region, get in touch with our Affinity Insurance specialists.
For details of the Affinity solutions and services available in your country, please speak with your local Affinity team contact.
