Uber Secures Foothold in Middle East by Acquiring Careem for $3.1 Billion
Uber expects to extend reach from Morocco to Pakistan through new partnership
by Lark Gould
In a bold move, Uber is taking its disruptive ride hailing app into a greater swath of the Middle East in its acquisition of Careem. The San Francisco based ride hailing technology company acquired Dubai-based Careem this week for acquire Careem for $3.1 billion, consisting of $1.7 billion in convertible notes and $1.4 billion in cash – all expected to close in Q1 2020.
While Uber has been available in Dubai since 2014, the acquisition of Careem gives Uber reach well beyond the United Arab Emirates, including Pakistan, Cairo, Morocco Jordan and Saudi Arabia. Upon closing, Careem will become a wholly-owned subsidiary of Uber, preserving its brand and reporting to its own board made up of three representatives from Uber and two representatives from Careem. Careem and Uber will operate their respective regional services and independent brands.
“This is an important moment for Uber as we continue to expand the strength of our platform around the world. With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region. Working closely with Careem’s founders, I’m confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world,” said Uber CEO, Dara Khosrowshahi.
The greater Middle East region is already seeing the economic and social benefits of rapid technology adoption and improved access to transportation. This transaction supports the collective ability of Careem and Uber to improve the region’s transportation infrastructure at scale and offer diverse mobility, delivery and payment options. It will speed up the delivery of digital services to people in the region through the development of a consumer-facing super-app that offers services such as Careem’s digital payment platform (Careem Pay) and last-mile delivery (Careem NOW).
Both companies believe the transaction will provide an opportunity to expand the variety and reliability of services offered, at a broader range of price points to serve more consumers.
Careem, established in July 2012, operates in 120 cities across 15 countries and has created more than one million economic opportunities in the region.
“Five years ago, Uber launched in Dubai. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year. Today we are taking the next step in this journey—well, it’s more like a leap, and a big one,” wrote Khosrowshahi in a note to Uber employees today. “After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.”