Why Is Uber Buying Careem?
Global ride-hailing giant Uber has agreed to acquire its Middle East rival Careem in a $3.1 billion dollar deal, ahead of its hotly anticipated initial public offering. Since its beginning, Careem has raised around $800 million from investors. Its backers include German car maker Daimler AG, Japanese internet company Rakuten, Chinese ride-hailing company Didi Chuxing, and Saudi investor Kingdom Holding Company. Post-acquisition, this will be one of the largest technology industry transaction in the greater Middle East region.
If you’re wondering why this deal is grabbing eyeballs worldwide and why has Uber acquired its competitor Careem, instead of going for a head-on battle in the Middle East region, read on!
Expanding taxi dispatch business
Started in 2012 in Dubai, Careem now operates its taxi business in more than 120 cities in 15 countries serving 33 million+ customers. This deal consolidates Uber’s advantage in Careem’s major markets such as Egypt, Jordan, Pakistan, Saudi Arabia, United Arab Emirates, and Turkey, providing Uber access to ~400 million local population.
Entering logistics & payment business
With Careem’s digital payment platform- Careem Pay and last-mile delivery service- Careem NOW, Uber will now be able to expedite the development of a customer facing super app. This super app will offer diverse mobility, delivery, and payment options to the customers.
Acquiring local operating expertise
Even though Uber has been a raging success in many countries, it has not been able to conquer markets in China, Russia, and Southeast Asia. Regional operating expertise and regulatory risks are often limiting factors to success. This deal combines Uber’s technical expertise and global leadership with Careem’s technology infrastructure in the Middle East and proven ability to develop innovative local solutions.
Leveraging regional technology adoption
The mobility and broader internet opportunity in the Middle East are massive and untapped. This combined with rapid technology adoption and improved access to transportation over the years has made the region the most conducive grounds for growth and innovation, attracting budding entrepreneurs and huge investments.
This bold move by Uber to acquire its competitor Careem in the Middle East in a multi-billion dollar deal has served as a catalyst for the region’s technology ecosystem. This will not only pump in resources but will also encourage budding entrepreneurs to make their mark in the rapidly evolving transportation and logistics space. Besides the prominent economic and social benefits being accrued by all stakeholders, the new enterprises will also propel the region into the digital future.
If you’re enthusiastic about starting your own taxi or logistics business in your city, get a free consultation with our on-demand business consultants today!