Ride-hailing technology firm Uber has agreed to buy its Dubai-based rival Careem for US$3.1 billion.
The company will acquire all of Careem’s mobility, delivery and payments businesses across the Middle East including major markets in Egypt, Jordan, Pakistan, Saudi Arabia and the United Arab Emirates.
The deal is expected to be completed by the end of the first quarter of 2020. After closing, Careem will become a wholly-owned subsidiary of Uber but will keep its branding.
CEO Mudassir Sheikha will continue to lead Careem’s business and will report to a board made up of three representatives from Uber and two from its own company.
Uber chief executive Dara Khosrowshahi commented: “This is an important moment for Uber as we continue to expand the strength of our platform around the world. With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful start-ups in the region. Working closely with Careem’s founders, I’m confident we will deliver exceptional outcomes for riders, drivers and cities in this fast-moving part of the world.”
Sheikha added: “Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people and building an awesome organisation that inspires. The mobility and broader internet opportunity in the region is massive and untapped, and has the potential to leapfrog our region into the digital future. We could not have found a better partner than Uber under Dara’s leadership to realise this opportunity. This is a milestone moment for us and the region, and will serve as a catalyst for the region’s technology ecosystem by increasing the availability of resources for budding entrepreneurs from local and global investors.”
Uber says the acquisition will allow it to speed up development of a “consumer-facing super app” that offers services such as Careem’s digital payment platform, Careem Pay and last-mile delivery, Careem Now.
The deal follows rumours that Uber is preparing to list its shares on the New York Stock Exchange. The firm continues to face court battles over drivers’ rights, while local authorities have taken action against the company over safety fears, including London. Uber posted a loss of $1.07 billion in the three months to September 2018.