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Thursday, 23 May 2019

Ride-sharing application revolutionising bus transport in Egypt

Swvl is a fast-growing startup that provides a bus-sharing service that offers a more comfortable and convenient alternative to public transportation

Hana Afifi , Wednesday 25 Apr 2018
Swvl
Mass trasnit ride-hailing app Swvl co-founders Mostafa Eissa Kandil (left), Mahmoud Nouh (center) and Ahmed Sabbah (right) surrounding a Swvl bus (Photo courtesy of Swvl)
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As I wait anxiously at AUC Avenue at 9:30am for my bus ride, I get a phone call from an unknown number; it is the bus captain from Swvl (pronounced swivel), a fast-growing bus ride-sharing application in Egypt.

Swvl uses vehicles rented from tourism companies, coupled with online technology, to offer a bus transportation service from a company that owns no fleet, the company’s CEO and co-founder Mostafa Eissa Kandil tells Ahram Online.

The company announced on Monday that it closed an $8 million Series A round of funding by regional venture fund BECO Capital, Africa-based investor DiGAME and global venture capital fund Silicon Badia.

I cross the street to ride the empty white mini-bus, which has no Swvl sign, but only a “download, book, ride” sign in the Swvl pink punch colour, in what feels like a private bus rental to take me to Maadi.

The new bus service is only a little over one-year-old, founded in March 2017 by former Careem market launcher Kandil, along with Mahmoud Nouh and Ahmed Sabbah.

My EGP 23 line is one of 200 fixed routes currently offered by the startup in Cairo and Alexandria.

After I board the bus, the captain tries to reach a client over the phone, but the user goes on to miss their ride. The driver does not seem surprised or angry, giving the impression that this not a rare occurrence.

Captains wait for users to hop on the bus within a 10-minute interval, after which the driver makes one call to the user before the bus departs, the captain tells me.

The bus is one of 300 operated by the company that offer morning and evening commutes with prices ranging from EGP 15 to EGP 35.

Swvl was able to expand thanks to a $500,000 seed funding investment made in July 2017 by Careem, which has since been providing mentorship to the company to help it grow further.

Swvl saw a gap in the market and capitalised on it, offering a service between the cheap but less comfortable public transportation and the relatively expensive cab-hailing apps.

Although the app has at least 500,000 downloads and hundreds of thousands of bookings per month, only two other people shared my ride.

Ten minutes after I get on the bus, a young upper-middle class woman in her twenties joins the ride, followed by a suit-wearing man in his thirties carrying a work bag, who sits next to the captain.

The bus makes its way from Fifth Settlement to Maadi with just three riders. But this low number of commuters does not reflect the average number of clients who use the app.

‘The app for millennials’

Swvl is mostly used by university students and corporate employees, says the 25-year-old Kandil.

“We have become a family,” the bus’ 40-year-old driver tells me with an enthusiastic smile.

The captain speaks of his usual 7am commute, when the bus is full every day with people going to work.

“When someone does not come, we call and ask about them,” he said.

“Sometimes we stop at a street vendor and buy sandwiches for everyone,” he said, giving a laugh that conveyed a sense of belonging and community.

The captain’s words echo those of Kandil, who tells Ahram Online that riders have formed friendships through their daily commutes.

“It’s the journey, not the destination,” Kandil tells me, in a tone filled with enthusiasm and faith.

Kandil has big dreams for the bus service. It is not just about booking a trip on a bus; the company wants to make an experience out of the ride.

Swvl often facilitates rides to concerts, football games, and to holiday destinations on occasions such as Eid and New Year’s Eve.

Most recently, Swvl partnered with Elmenus for a food-hopping experience in downtown, where 15 riders were taken to four restaurants in the second food-hoppers experience by Swvl.

“On a personal level, it was the most beautiful day I have spent in Cairo in a long time,” one rider said about the experience in a video posted by Swvl on Facebook.

The company chooses to brand itself as a service for millennials, and aims to change the notion that bus transportation is for the underprivileged. 

This quarter, Swvl will introduce monthly and weekly subscriptions, according to Kandil.

Starting May, users should also be able to book a Swvl bus to travel to holiday destinations.

The company wants to expand its service to utilise logistical networks by using the Swvl wallet for payments such as bills as well as venture into trucking for transporting goods.

Swvl also wants to introduce first mile-last mile connections, which involves providing transport to stations instead of walking.

Kandil says people are buying vehicles to be used by Swvl as an investment, which is why the company’s CEO does not think tourism recovery will affect Swvl, which currently uses tourism company buses.

Kandil added that the company offers a lucrative opportunity for investors.

Swvl is also expanding into Saudi Arabia, Jordan, and Pakistan, according to Kandil.  

‘Competition keeps us on our toes’

A green and blue Mwasalat Misr bus numbered “M5” passes by, with a number of men on their phones, probably using the wifi service on the bus. 

Unlike Swvl, Mwasalat Misr does not have an app for booking.

Kandil says his company is not in competition with Mwasalat Msir, but that they rather complement each other.

Mwasalat Misr has assets that Swvl can use, says Kandil.

The two companies have been in talks about integrating, so that people can book Mwasalat Misr buses through the Swvl app.

However, there could be competition between Swvl and Uber Buses, which are set to be launched soon.

“Competition keeps us on our toes, it is healthy [...] it makes us innovate faster than we would if operating alone,” says Kandil.

Minister of Investment and International Cooperation Sahar Nasr revealed last September that Uber is set to introduce public bus services pending the issuance of a law regulating the company’s operations in Egypt.

Last month, the government referred the draft law on ride-hailing apps to parliament.

Legally, Swvl stands in the safe zone, as tour company vehicles and drivers used by the company already have commercial licences, Kandil says.

Drivers already pay insurance and taxes to get their licenses.

“The new legislation on ride-sharing will only confirm our legal status,” Kandil says.

The company will have to pay licence fees and could pay more taxes with the new legislation.

The main challenge for an entrepreneur

When Kandil quit his job at Careem, he thought that the logistics of operating Swvl would be the toughest part. 

He realised, however, that it is the mental factor that is challenging; to manage your psychology, to motivate yourself, and to keep innovating.

Last October, Swvl was among the top 50 startups to watch in the Middle East.

Last month, Kandil, Nouh, and Sabah were on the list of Forbes’ Arab 30 Under 30.

Kandil's advice to young people is to take risks.

“The biggest risk is not taking a risk, especially at a young age,” Kandil says.

For now, Swvl mainly covers Tahrir, Dokki, Mohandessin, El-Sheikh Zayed, 6th of October, Smart Village, Maadi, 5th Settlement, Rehab, Hadayek Al-Ahram, Haram, Nasr City, Madinaty, Shorouk, Zamalek, Heliopolis, and Abdeen.

The company expanded operations to Alexandria last October and plans to expand to more cities.

My pick-up point was from 1st Settlement, one of the few areas in Cairo not covered by the service, which is why I had to pay EGP 36 for a Careem ride to reach my stop.

Luckily, the young woman who sat in front of me lives only two minutes away from her stop.

The other user starts talking loudly on the phone, which makes me rethink the idea of mass rides.

Moments later, however, I awaken from my thoughts when the young woman and I start discussing which stop is closest to our destinations.

A bit more familiar with each other now, bonding over destinations, we leave the bus and agree to walk together.

She usually takes her car, but she is trying to walk more and be more efficient and environmentally aware by using mass transportation. 

Indeed, a 2014 World Bank study shows EGP 48 billion are wasted every year in Greater Cairo due to congestion, with cost components including time wasted in slow-moving traffic, costs of excess fuel wasted during congestion, the economic cost of carbon dioxide emissions, and the losses in productivity.

We part ways and I arrive at my destination after a 20-minute morning walk in the tree-decorated streets of Maadi, grateful for the morning acquaintance that confirmed Kandil's words on the nature of Swvl’s friendly rides.

“Do you use Swvl yourself?” I ask Kandil.

“Every day,” he responds promptly.

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