By: Hana Kotb
In the Middle East, Uber and Careem are in preliminary talks about combining their ride-hailing services in hopes to resolve a very expensive rivalry. They have discussed a lot of potential deal structures but have not come to an agreement yet.
In its discussions with Careem, Uber has said that it would need to own more than half of the combined company in order to have the majority share, if not buy Careem all together. However, Careem declined this deal, saying, “We’re only getting started.”
Under one proposed arrangement, Careem’s current leaders would manage the new combined business on a day-to-day basis. Another proposal would have Uber acquire Careem. From the looks of it, current discussions may not result in a deal.
Careem is currently in talks with investors to raise half a billion dollars, raising the Dubai-based company’s worth to 1.5 billion dollars.
Uber’s CEO Dara Khosrowshahi said at a conference in May that he believed Uber would come out on top in India, the Middle East and Africa, adding, “We are going to be, I believe, the winning player in those markets, and we’re going to control our own destiny.” Uber is not new to merges, having merged with Yandex NV in Russia and with Grab Holding Inc, based in Singapore, throughout the Southeast region.
On the other hand, Careem operates in over 70 cities, in over 10 countries from North Africa to Pakistan, and is a leader in most of them. Its biggest market is Saudi Arabia, where Uber has been planning to sign up female drivers to take advantage of the country’s decision to overturn a ban on women driving. Saudi Arabia’s sovereign wealth fund is a large investor in Uber, after acquiring a $3.5 billion stake in the company in 2016. However, Saudi billionaire Prince Alwaleed Bin Talal’s investment vehicle Kingdom Holding Co., and Saudi Telecom Co.’s venture capital arm STV are also investors in Careem.
So from the looks of it, both sides seem equally equipped, and it would be very interesting to see whether or not they merge, and if so, what would the structure of the new company be.
Who’s your go-to cab? Uber or Careem?