Uber to Acquire Careem to Expand the Greater Middle-East Region
The rapid build-out of the digital technologies and services in the past 8-10 years have covered almost every aspect of a man’s daily life necessities and have provided people with many other facilities along with it. Today people can buy clothes, electronics, home products, etc on the internet.
There are various online home delivery services for different requirements like food that has eased out additional efforts. An individual can get anything done in just a click of a button and save a lot of their time and energy which is the main reason why these services are ruling the market right now.
There is a number of businesses that really took off because it knew how to make good use of the digital platform for productivity. One such increasing business type is online cab services. People now don’t spend much time searching for a taxi manually to drive them to someplace they rather book one for themselves on their own.
With time many ride-hailing companies have emerged and excelled at regional as well as global level. These companies have mobile applications using which you can book a cab anywhere and for any destination within its service area.
Uber is the world’s first location-based online cab services which was launched 10 years ago that operates in major cities across the globe. It provides cabs based on the car type and number of people who can ride on it. Over the years Uber has extended its service area slowly and steadily to one country to another and city by city. Some of these major cities are New York, London, Ottawa, Paris, Dubai, Seoul, and Delhi.
Just like Uber, Careem is also an online cab booking company which initially started as a corporate car service which covers the Middle-East and Pakistan region only. By accessing the application of Careem, customers can get a taxi on their doorsteps and ride to any desired location. Few of the major destinations of this cab service are Dubai, Sharjah, Ajman, Riyadh, Kabul, Lahore, and Karachi. It is the most accepted cab service in the whole UAE as Careem brought a revolution in the region’s transportation and economy of online taxi facilities.
Uber to Dominate Middle-East by taking over Careem
Uber has been on top of its business in almost every city where its service is available except the Middle-East region where Careem has been a popular choice among the customers. The 2 ride-hailing companies have been arch-rivals ever since Uber has stretched its business in the Middle-East but not anymore.
Uber has officially announced that Careem will be a subsidiary of Uber that will work under the same brand as an independent company led by the same authority. It will follow the guidance of its own board that consists of 2 members from Careem and 3 from Uber. The contract taking place in the Greater Middle-East is the largest transaction in the history of the region.
Uber has made an agreement with the UAE based cab services to acquire the company with a 3.1 billion dollar deal that is signed between the two firms. Payment done by Uber will be carried out as it will pay $1.4 Billion in cash and $1.7 Billion in convertible notes. Although the agreement is yet to be put into execution as the deal still requires regulatory approvals. The buyout will most probably end by 2020. This arrangement also holds the purpose of settling the cost rivalry in the Middle-East services which has been a major point of concern.
Careem had observed massive growth in its service in the span of 4 to 5 years. It is operational in 15 countries and in cities 10 short of a hundred. It was gradually carrying its business to other fields like food and package delivery service before merging with Uber. Although Careem has been dealing with few glitches and disturbances as far as security of data is concerned that will be addressed beforehand by Uber with full anonymity.
The acquiring of Careem will allow Uber to expand its business to greater Middle-East which has a strong population of young people who are the potential customers likely to utilize the facility. The place is already progressing in terms of technical knowledge and in other economic and social aspects.
With Careem and Uber working as a single unit the transport facilities at Greater Middle-East will be on the road to improvement. Along with this, the area will observe better services in delivery and flexible options for payment. This arrangement can lead towards the use of Uber’s prowess and experience of being a global giant and Careem’s perspective of building successful innovative abilities to bring enhancement on a regional level.
The expansion in the facility is also a gateway to higher work opportunity. Increase in the service will lead to more responses and more cars on the road that eventually will require more drivers. Plus, the service being busier will provide consistent earning to the employees.
This, however, isn’t Uber’s first international Collaboration the company has tried before to take its overseas dominance to Southeast Asia and China that didn’t end with the expected results and turned out to be a costly affair. The companies faced lose as a result Uber gave away the business in China. Therefore stepping up to spread the business to greater Middle-East is an important investment for Uber.