Uber announces acquisition of Careem, to operate it as independent brand

Published March 26, 2019
Careem will operate independently under the current CEO Mudassir Sheikha. — Dawn.com
Careem will operate independently under the current CEO Mudassir Sheikha. — Dawn.com

Uber announced on Tuesday its acquisition of Careem's business, from Morocco to Pakistan, while still letting the latter operate as an independent brand under its current management.

According to a press release from Uber CEO Dara Khosrowshahi, the company "intends to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha."

Speaking about the decision to let Careem operate as an independent brand and operate separately, Khosrowshahi said: "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.

He added: "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."

The press release further announced that the acquisition is subject to regulatory approval in various countries, which is not expected to be acquired until 2020.

It further explained that since both companies will continue to largely operate separately after the acquisition, "very little will change in either teams’ day-to-day operations post-close."

The deal will see Uber pay $1.4 billion in cash and the rest in notes convertible to Uber shares.

Dubai-based Careem boasts more than a million drivers and 30 million users across 90 cities.

Uber Technologies Inc, a US-based global logistics and transportation company, has been seeking new avenues of growth even as it faces severe competition in its core business of ride hailing from rivals like Lyft Inc.

The IPOs of Lyft and Uber represent a watershed for Silicon Valley's technology unicorns, which for years have snubbed the stock market in favour of raising capital privately, with investors happy to back their frothy valuations.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.