Dude, Where’s My Cab? Careem to cease services in Oman
February 12, 2020
2 min read
What's going on here?
Careem, the Dubai-based ride-sharing company owned by Uber, announced it is pulling out of operations in Oman after 3 February 2020.
What does this mean?
The cab-hailing company initially launched its services in Oman during May 2017, but was shortly shut down by the government, which required Careem to first work with licensed taxis. The company resumed services in October 2018, after pairing with “Marhaba Taxi” and registering Marhaba’s drivers onto its ride-hailing app.
Careem’s second discontinuation in Oman is also due to regulatory issues, because there is an absence of legal and commercial mechanisms that allow Careem to operate in a healthy investment environment. Marhaba Taxi on the other hand, wil be continuing its operations and on-demand services in the country.
The company presently operates in the United Arab Emirates, Egypt, Saudi Arabia and Jordan with regulatory approvals pending in Pakistan, Morocco and Qatar. Careem’s decision to move out of these markets also comes 2 weeks after Uber completed its £2.4bn acquisition of Careem (which you can read about here).
What's the big picture effect?
Ride-hailing apps have faced opposition in markets across the world for undermining local taxi fares and potentially driving them out of business. This explains why Careem partnered with Marhaba Taxi in Oman; it is the same strategy as the joint venture “Hala” with Dubai Taxi in the United Arab Emirates (you can find out more here). The action is to ensure the taxi market remains competitive for local players, while introducing a greater choice for consumers.
The reason for Careem’s departure from Oman is also similar to its decision to leave Turkey from 31 January 2020 onward, which is due to regulatory factors which resulted in the Careem being hit with several governmental fines.
With the completion of the Uber-Careem merger, the Dubai based ride hailing company is now focused on improving profitability. It helps explain Careem’s withdrawal from Omani and Turkish markets, as the company will focus on areas and cities in which it can expand successfully.
Careem’s service will still be available across 13 markets, so its prospects on the middle-eastern horizon still look sunny.
Report written by Evania D’souza
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