Uber has announced plans to acquire Careem, one of its main competitions in the Middle East. The company, based in Dubai, was founded in 2012 and, since then, it operates in more than fifteen countries, including Egypt and Saudi Arabia.
“The acquisition of the company dubaití would represent an impulse in the Middle East for Uber.”
Initially, Careem functioned as a corporate transport service, however, then adopted a business model similar to that of Uber, becoming its regional rival. In addition, recently, the company expanded into the business of home-delivered food and the sending of money, getting valued by private investors in more than 2 trillion dollars.
The purchase agreement, on the other hand, is estimated at 3,100 million dollars and will require prior approval from the regulatory institutions, which means that it can not be completed until 2020. However, this acquisition will not involve a merger. that Careem will maintain its brand and will operate independently, sharing only certain aspects of software with Uber.
The purchase of Careem represents a relief for Uber who, at the end of 2018, lost 865 million dollars in subsidies in an attempt to face the fierce competition of the sector. In this sense, the acquisition of the company dubaití would represent a boost in the Middle East to allow entry to markets such as Iraq, Palestine or Morocco, where Uber has no access.
However, the union of both companies can be a factor of concern for certain users, especially in terms of privacy and data security, which is why Uber was already fined in November 2018.
This is related to the attack Careem suffered in 2018, when the company was the victim of a theft of 14 million data from its users. In addition, in 2017, Careem cooperated with the Egyptian authorities to allow them real-time access to the location of their users.