Uber was never much for optics, but watchers were still stunned when it accepted $3.5 billion from Saudi Arabia’s Public Investment Fund in June 2016. The investment was the largest ever for PIF, the kingdom’s main investment fund, and gave managing director Yasir Al Rumayyan a seat on Uber’s board.
“Uber has taken a $3.5 billion investment from a government that effectively prohibits women from driving—let alone driving for Uber,” Dan Primack wrote in Fortune at the time. “The company has basically invited the Saudi government into its board room.”
A year later the picture could hardly be more different. Saudi Arabia has decreed that women will be allowed to drive, without their male guardian’s permission. The Saudi Arabian Transport Authority is reportedly “ready to provide job opportunities for Saudi youth of both sexes.” Uber is planning a specialized training center for Saudi women who want to drive on its ride-hailing platform.
Uber can’t be credited for getting Saudi Arabia to change its stance on women driving. But in meetings with Saudi officials, the company used its position as PIF’s single biggest investment to push for women being allowed to drive, a person familiar with Uber’s operations in the Middle East told Quartz. The company framed the issue as a path toward economic empowerment in a country that has made it a stated goal to put more Saudi nationals—women included—to work. Before Uber finalized the investment, “the debate internally was sort of like well, could we be a part of making progress in that country?” the person said.
“We’ve always said that women should be allowed to drive,” Uber said in a statement. “In the absence of that, we’re proud to have been able to provide extraordinary mobility that didn’t exist before. We look forward to continuing to support Saudi Arabia’s economic and social reforms.”
Uber launched in Saudi Arabia in 2014. Careem, a competing service that operates mostly in the Middle East, arrived a year earlier. The popularity and rapid growth of ride-hailing catalyzed change in Saudi Arabia’s transportation industry that may have helped to pave the way for more dramatic reforms. ”We broke a lot of taboos at a pace we never even thought was possible,” Abdulla Elyas, cofounder and chief people officer of Dubai-based Careem, told Quartz.
In their early days, both Careem and Uber worked mostly with drivers from other countries. It was then common for households to have a personal driver, typically someone from Pakistan, Indonesia, or another country who came to work full-time for a Saudi family. Women could also get rides in professional taxis, also manned mostly by non-Saudi drivers, but the cars were difficult to hail and it was “socially not nice to be seen in a taxi,” said Elyas, a Saudi born and raised in Germany.
Careem knew that to grow the service it needed to get Saudis driving as well. “We said, if we really want to scale, the only way to really scale fast and to offer an amazing service is to actually get Saudis on board,” Elyas said, “which is something that is very weird to think of in a society like Saudi, where it’s very conservative.” He said it was an open question whether a Saudi woman would ride in a car driven by a Saudi man. “It’s easier for Saudi women to sit in a taxi with a Pakistani, clearly labeled a taxi driver, than to sit in a private car with any, you know, Saudi guy,” he said.
Over the last year and a half, Careem has brought on nearly 100,000 Saudi drivers, which it calls “captains.” Uber witnessed a similar shift. More than 90% of its drivers in Saudi Arabia today are Saudis, compared to just 20% a year ago, the source familiar with Uber’s operations in the Middle East told Quartz. Late last year, the Saudi government banned non-Saudi citizens from working for Uber and Careem, restricting them instead to jobs on traditional taxi companies.
Elyas said Careem didn’t discuss women driving in its meetings with regulators, focusing instead of getting more men and Saudi youth employed. Last November, Careem introduced a special women-only version of its service in Dubai, “Ameera.” Founded in 2012, Careem operates in more than 70 cities in the Middle East, North Africa, and Pakistan. The company has raised $574 million at a valuation of more than $1 billion. Its June fundraising was led by Kingdom Holding, the investment vehicle of Saudi billionaire prince Alwaleed bin Talal.
Some feared that ride-hailing might continue to enable the ban on women driving. Seventy percent of Careem riders in Saudi Arabia are women, compared with 50% to 60% in other Middle Eastern countries. Eighty percent of Uber rides in Saudi Arabia are taken by women. In January, Reuters reported that Careem was working with the Ministry of Labour to provide subsidized rides to low-income working Saudi women.
“When I first heard of this scheme, I thought, oh shit, they’ve found a technological way around allowing women to drive,” said Bernard Haykel, professor of Near Eastern studies at Princeton, referring to the female rider subsidies. “I’m thrilled it hasn’t worked out that way.”