Uber Invests $250 Million to Expand in the Middle East

Uber over the next several years will begin service in new cities in Saudi Arabia and Egypt and enter Pakistan, beginning in Lahore, said Jambu Palaniappan, the company's regional general manager for the Middle East, Africa and Central and Eastern Europe. The investment will go toward paying drivers, expanding staff and enhancing Uber's mobile application.

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"We're really bullish on where we're headed here," Palaniappan said Tuesday at Uber's regional headquarters in Dubai. "Succeeding here is a really important stake for our global business." The closely held company has a valuation of more than $50 billion.

Uber entered the region two years ago and operates in nine countries overseen by Palaniappan: Bahrain, Egypt, Lebanon, Qatar, Saudi Arabia, Jordan, Turkey, Morocco and the United Arab Emirates. Its app is available in Arabic, Hebrew, Turkish and English. The company's service in Israel is run through Uber's Western Europe office and isn't part of the new investment.

The Egyptian capital of Cairo, known for its snarling bottlenecks, has become Uber's fastest-growing city in Europe, the Middle East and Africa, less than a year after the company began service in the country, Palaniappan said. The number of Uber drivers in Cairo has grown sixfold since May. About 40 percent of the company's drivers in Egypt were unemployed before joining the service, he said.

"When we first went there people said, 'You're crazy, there's no way that will work,'" he said.

Calling sexual harassment a "huge challenge in Egypt," Palaniappan said Uber has worked with HarassMap, an Egyptian service that tracks such incidents, to train drivers in Cairo about sexual harassment.

The company plans to roll out UberPool in the region soon, allowing several riders to share a car to the same destination. And a month ago, the San Francisco-based company began a pilot project allowing cash payments in Riyadh and Jeddah, Saudi Arabia, responding to user requests for more options beyond credit cards.

In Saudi Arabia, where women aren't allowed to drive, women make up more than 70 percent of passengers, Palaniappan said. Female Uber drivers are fairly common in Egypt, Jordan and Lebanon, he said.

The company has gotten creative about meeting challenges in a region known for social and political turmoil. After disputes over a landfill's location prompted trash to pile up over the summer in Beirut, Lebanon, Uber worked with two nongovernmental organizations to provide recycling pickup through the app. The service moved about two tons of material over a couple of weeks, Palaniappan said.

Uber faces competition in the region from local apps such as Careem, which operates in Jordan, Egypt, Kuwait, Qatar, Bahrain, the U.A.E., Saudi Arabia, Lebanon, Morocco and Pakistan.

"It forces us all to stay on top of our game," Palaniappan said.

© 2015 Bloomberg L.P.