Global ride-hailing service provider Uber is buying its Middle East competitor Careem for $3.1 billion. It is the largest-ever technology purchase in the region.
The New York Times notes that the Careem’s CEO Sheikha will lead Careem’s business under uber. Careems CEO will report to a board made up of two representatives from Careem and three from Uber. Uber said that the $3.1 billion purchase consists of $1.4 billion in cash and $1.7 billion in convertible notes. Careem will keep its brand as a fully-owned subsidiary of Uber. But it will operate as an independent company led by its original founders.
Uber’s innovation with Careem
Dara Khosrowshahi Uber’s CEO believes that the deal expands the US-based company’s strength 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 startups in the region,” says Khosrowshahi .
In a note sent to employees of Uber, which was later published by CNBC, CEO Dara Khosrowshahi said that the structure of the deal will allow Uber and Careem “to create new products and trying new ideas not through one but through two strong brands”, but said that over time he expected parts of their networks will be integrated to increase efficiency, reduce waiting time, and launch of new products like large-capacity vehicles. The process will be complete by early 2020 says the Uber CEO.