Can Uber’s global expansion be stopped Middle East based ride-share startup Careem and their latest acquisition in Pakistan?
Dubai-based Careem, hailed as the ride-sharing app of the Middle East, made another move to expand its influence Wednesday by acquiring Pakistani carpooling startup Savaree. The move seems to be an immediate response to Uber’s move into the south Asian country.
Careem announced the move, with little detail but much fanfare, on its Facebook page. According to Tech in Asia, Savaree will maintain its brand and operate under the Careem umbrella. Savaree founder Madeeha Hassan will join Careem’s global product team with responsibility over operations in Pakistan.
The UAE company raised $60 million in financing in November 2015 during a Series C round led by the Abraaj Group in order to expand beyond what it calls its core markets: Saudi Arabia, the UAE, and Egypt. Careem has previously said that it is seeing an average rate of 30% growth month on month.
“We have acquired Savaree for the talent and immense local knowledge it brings along,” Careem CEO Junaid Iqbal told Tech in Asia, implying they might be looking to acquire more local players in the near future. “We’re open to all options that are synergistic.”
Uber faces stiff local competition around the world
In a large swathe between Morocco and Pakistan, Careem seems like the most honorable opponent Uber faces, with equal ambitions and perhaps steadier growth.
Since Careem’s Series C, Uber has already entered Lahore, saying in a statement they would have a huge market considering the primary means of transportation in the city is the auto-rickshaw. Having operated an auto-rickshaw service in India, the ride-share giant has since shut that project down. The press surrounding that expansion left out the presence of Careem, which had been operating in Lahore since early 2015 and expanded to Karachi this past November.
“Lahore is our first city globally to have launched cash right from the beginning,” Uber spokeswoman Shaden Abdellatif told CNN earlier this month. “It’s a huge city. There are several universities and a lot of people commuting every day.”
It remains to be seen if Uber’s strategy of muscle is going to work in the long term with so many local cab-hailing, ride-sharing and carpooling services available around the world. Earlier this month, Uber abandoned Edmonton, Alberta upset over regulations in the city, opening up the market to TappCar. In the larger Chinese market, they are unceremoniously being crushed by local rival unicorn Didi Kuaidi. If Uber thinks it will be able to corner the market and getting Lahoreans to hop off their rickshaws, they should know that development of rickshaw-hailing startups in India will likely have an influence on neighboring Pakistan.