Ridesharing In The Middle East: Rumors About An Uber–Careem Merger Surface
What started on a snowy 2009 evening in Paris when Travis Kalanick and Garrett Camp couldn’t get a cab has evolved into a $48 billion company. And that’s not all the growth that Uber has in mind. It may be positioning itself for a merger with Careem, the ride-sharing transportation network company based in Dubai.
Uber has been talking up its position and potential for growth in the Middle East — with CEO Dara Khosrowshahi telling a conference in May that he believes it can be the “winning player” in the market. Dara noted that Uber is also looking to India and Africa, where Uber would have the ability to “control our own destiny” in those markets.
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Careem: 80 Cities in the Middle East & Growing
Mudassir Sheikha, a Stanford graduate and former McKinsey consultant, is co-founder of Careem, the Uber of the Middle East. In an interview with Forbes, Sheikha listed three indicators that signal how Careem, founded in 2012, has become an institution:
- “We impact the lives of the majority of people, 50+%, in the region,
- We get rated as the #1 employer for people from the region (both locally and those studying abroad).
- Our alums take on leadership roles at other companies/institutions in the region.”
Careem has operations in 80 cities in 13 countries in the Middle East, North Africa, and South Asiawith a valuation of $1.2 billion. “Uber has been following us in the local innovation,” he said, pointing, for instance, to the company’s policy to invite Saudi women to schedule a month’s rides at a time. Of course, since that policy was enacted, Saudi women have gained the right to drive. Careem invited Saudi women to join their driving work force on the day that their government opened up a woman’s right to drive.
Uber’s Dominance in the Ride-Sharing Industry
Meanwhile, Uber’s reach into ride-hailing continues to grow and evolve. Bloomberg’s sources told it that Uber has said it would need to own more than half of the combined company, if not just an outright purchase of Careem, which leaves only two possible scenarios:
- Careem’s current leaders could manage a new combined business, day to day, with potentially both brands being retained in local markets.
- Uber could acquire Careem outright.
Bloomberg also reports that Dubai-based Careem is in talks with investors to raise $500 million, which would result in a valuation of $1.5 billion. Careem is said to have been in early talks with banks about a potential IPO in January.
Neither company has publicly confirmed any talks.
Careem spokesperson, Maha Abouelenein, said, “We do not comment on rumors. Our focus remains to build the leading internet platform for the region, from the region. That means expanding to new markets and doubling down on our existing markets by adding new products and services to the platform. We are only getting started.”
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