Uber exits Pakistan, hands over ride-hailing reins to Careem

LAHORE: Uber Technologies Inc. has shut down its Pakistan operations, ending its ride-hailing services in the country, but will continue to operate on the Careem platform, the company said.

The closure, announced on Tuesday, marks the end of Uber's operations in Pakistan, where it had been operating since 2016. The company had already closed its operations in several cities, including Karachi, Multan, Faisalabad, Peshawar, and Islamabad in October 2022 as part of its strategy to merge its business with Careem, its Middle East rival, which it acquired in 2019 for $3.1 billion. The merger of Uber and Careem's businesses was completed on April 30, 2024.

Careem will continue to operate independently, offering ride-hailing services across Pakistan.Uber had already planned to merge the business when it acquired Careem. The business strategy was to minimize the loopholes and poor user experiences, while efficiently using the two companies to complement each other’s strengths and better serve the region through tailored experiences.

Under the deal, Careem became a wholly-owned subsidiary of Uber but continues to operate independently with its own branding, services, and separate app.

Currently, Careem Rides operates in 10 cities across Pakistan: Karachi, Islamabad, Lahore, Peshawar, Multan, Faisalabad, Abbottabad, Gujranwala, Sialkot, and Quetta. Careem is also offering various services to corporate clients and common users in Pakistan.“We’ve made the decision to cease operating the Uber app in Pakistan. Our subsidiary brand, Careem, will continue to operate, with the Careem app offering ride-hailing services across Pakistan and earning opportunities for drivers,’’ a spokesperson for the Uber said.

The decision, according to the company, was in line with Uber's global growth strategy, focusing on markets where we have opportunities for sustainable growth."We work closely with Careem Rides teams to minimize the impact on drivers that use the Uber app," spokesperson said.

Furthermore, Uber, in an ending note email to the users, stated that it has made the difficult decision to no longer offer the Uber app services in Lahore as of April 30, 2024. "Ride-hailing services will continue to be offered through our subsidiary brand, Careem, and you will have the option to sign up and request a trip on Careem to have a seamless experience."

Uber also sought permission from the users to share their information with Careem Rides. "In light of this, Careem Rides may reach out to you to check in and sign up. Please fill the form provided below by May 3, 2024, if you do not want your details to be shared with Careem."

To settle the users' cash balance in the Uber Wallet, the ride-hailing app stated that "it will be communicating with you in due course on the process for reclaiming your Uber Cash balance". However, no timeline has been given for returning the cash balance of the Uber app users.

Meanwhile, drivers associated with Uber have the option to sign up for Careem Rides and continue to operate their independent transportation businesses.As of now, Careem operates in 10 cities across Pakistan: Karachi, Islamabad, Lahore, Peshawar, Multan, Faisalabad, Abbottabad, Gujranwala, Sialkot, and Quetta.

An official of the ride-hailing app said that Pakistan is not a bad market for the industry despite recently seeing competition with the entry of new players including InDrive (Russian) and Yangoo (Dutch) companies.

The new entrant has pumped in the money and incentives to the users and drivers which also compelled the existing Careem to adopt new techniques including the ‘Bid-Ask’ model. This has given opportunities to the users as well as drivers to adopt the best suitable price for both.

Furthermore, the Uber App has given options to the drivers, who are the backbone of the ride-hailing business in any part of the world, to sign up to Careem Rides and continue to operate their independent transportation businesses. We work closely with Careem Rides teams to minimize the impact on drivers that use the Uber app.The official said that the majority of the drivers were already shifted, while the remaining drivers are also likely to avail this facility as well.