There should be a dedicated App Store section for REAL multiplayer games... *sigh*
Maybe try Real Racing 2?
I don't know whether you can challenge friends in the second iteration, but you will with the third.
It has true multiplayer at least.
I think it has WiFi multiplayer...
Many other cool games have WiFi multiplayer and if you're smart you can create a VPN for your friend to connect to to be in the same local network as you (bridged through the internet) and then go ahead and play ANY WiFi multiplayer game of which there are a couple more.