MIDDLE EAST– US-based ridesharing company Uber has completed the acquisition of its Emirati rival Careem in a US$3.1 billion deal. Uber announced in a press release.
With this deal, Uber will start operating in over 100 cities in the Middle-East and North Africa region, including Moroccan cities. The company, however, decided to preserve Careem’s brand.
Careem’s co-founder and CEO, Mudassir Sheikha, will remain at the head of the company, but the administration board will include three representatives from Uber and two representatives from Careem.
The deal allows Uber to penetrate important markets in the region, such as Egypt, Jordan, Saudi Arabia, and the United Arab Emirates.
“I’m looking forward to seeing even more innovation from Careem, as they continue to operate independently under their current leadership.
Working in parallel, our two platforms will be able to build upon the unique strengths of each, to the benefit of drivers, riders, and the cities we serve across the greater Middle East,” declared Uber’s CEO, Dara Khosrowshahi.
Uber has previously operated in Morocco, launching in Casablanca in June 2015.
However, the company stopped operations three years later because of local regulations.
In an official statement, Uber explained that their decision to stop operating was due to the lack of “clarity about integrating applications like Uber into the existing transport model.”
Uber also faced backlash from taxi drivers who said the service was undercutting them in an unfair way.
Tensions between taxi drivers and Uber drivers even escalated into violence, with numerous incidents of intimidation, threats, and car chases being reported.
The company announced that “the current regulatory uncertainty does not allow [them] to provide a safe and reliable experience that meets the requirements of [their] customers, both drivers and passengers.”
“We are excited to take Careem to new heights alongside Uber, who appreciates the significant regional opportunity, is supportive of our values and culture, and believes in the purpose that drives us,”Careem’s CEO said.
Careem was founded in March 2012 in Dubai, UAE. It started operating in Morocco in 2015 in Casablanca, then it expanded to Rabat, and Tangier.
Despite Careem being in an identical position to Uber when it launched in Morocco, the company overcame the challenges and gained popularity.
Careem estimates that it had 300,000 users in Morocco in 2018, while Uber only had 19,000 users in Morocco before terminating its services.