Uber’s Acquisition of Careem to Change Middle East Ride Hailing Sector
Last updated on September 19th, 2020
Right after Uber’s co-founder Travis Kalanick stepped down from company board, some good news is on the way for Uber Technologies. Reports claim that the government of Egypt permitted Uber Technologies’ acquisition of Middle Eastern rival, Careem, on December 29. Although passed under specific conditions, the deal will help Uber to expand its market in the MENA region, where Singapore-based Grab has already entered.
Details of the deal were leaked in March this year after prolonged negotiations. Becoming Uber’s subsidiary does not terminate the individuality of Careem, as the $3.1 billion deal permits it to function as an independent brand. Post clashing for the title of the nation’s largest transport network, the deal will aid both firms to increase their market share.
However, the Egyptian Competition Authority (ECA) has ensured that the deal does not affect transportation start-ups. As per guidelines, the merged firm will have to share its mapping and trip data with any emergent rivals. Moreover, the transportation companies shall share consenting rider’s details with any competing companies.
The controls listed by ECA will be applicable for five years or till the time more than one alternative ride-hailing providers achieve a 20 percent weekly share or 30 percent share collectively across various cities. Commenting on the ECA controls, an Uber spokesperson said, “We welcome the decision by the Egyptian Competition Authority to approve Uber’s pending acquisition of Careem. Uber and Careem joining forces will deliver exceptional outcomes for riders, drivers, and cities across Egypt.”
The acquisition will cover up the losses of Uber because of lost license in London and help the firm highlight its strong position in the global transportation network. Uber recently purchased a self-driving startup, named Foresight. The technology of the merger firm will fulfil Uber’s ambition of deploying a fully autonomous fleet.
Early in December, the ride-hailing service provider had partnered with aerospace startup, Joby Aviation for creating an electric air-taxi fleet. Uber has committed to launching a flying ride-hailing service by 2023. As of now, terms of the deal have been kept hidden and both the firms have made no comments about money related transactions. The multiyear commercial contract is meant to “launch a fast, reliable, clean and affordable urban air taxi service in select markets.”
With its strategic dealing technique, Uber has an upper edge in the ride hailing sector and is sure to give a tough time to its competitors. Ride hailing service providers from other regions are also making their way into the Middle Eastern market. For instance, Singapore-based Grab is aiding users in Singapore the Philippines to book rides in Japan and in 13 Middle Eastern countries via the Grab app. The users will be able to pay for their rides via GrabPay credits and earn GrabRewards. For easier navigation, the app will allow users to choose preferred language.
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