KARACHI: A number of ride-hailing app Careem Pakistan’s users received emails and push notifications from the company on Wednesday formally announcing the suspension of its ride-hailing services across the country.
Dozens of Careem users took to social media, sharing the screenshots of the notifications and expressing surprise over the ride-hailing app’s sudden departure from the Pakistan market.
But experts were not shocked and largely believed that the move was inevitable. In his comments to The News, cofounder of Data Darbar, an IT consultancy firm, Mutaher Khan said that the Wednesday notification was a formal confirmation of what was already expected, adding that the company had become largely “irrelevant” here. He also said that a slump in the number of its rides was not only limited to Pakistan but that it faced the same fate globally.
Headquartered in Dubai, United Arab Emirates (UAE), Careem started its operations in Pakistan in 2015, and in 2020, shortly before the Covid-19 pandemic hit, it was acquired by Uber for $3.1 billion. But, according to tech expert Habibullah Khan, Careem began to struggle right after the deal. In his comments to The News, Habibullah shared a thread he posted on X (formerly Twitter) in 2021 where he predicted the imminent downfall of the ride-hailing app. At the time, Careem Pakistan’s official X account had responded to it, reaffirming its commitment to keep the business afloat. In his thread, Habibullah said that after the Uber deal, Careem “lost [the] excellence [it was known for] in its core ride business”. He said the company’s “payment business failed and it could not get food business off the ground”. He added that Careem was oblivious to the brand damage from poor execution and betrayal of employees. It all started from that senseless firing — he said referring to the layoff in May 2020 where Careem fired 31 per cent of its workforce. The layoffs followed an 80 per cent drop in business due to pandemic-induced lockdowns.
Talking about the sensibilities of app users, Habibullah explained that “Gen Z is purpose-driven and responds to purpose-driven companies that show grace under pressure and put their people first.”
“The joy [Careem’s] service elicited is gone. [Careem’s] people will go through the motions and customer satisfaction will plummet,” he had said in a obituary he posted for the company four years ago.
“Post-Covid, Careem has never been the same in terms of ride-hailing services”, Mutaher said. “The company did 236 million rides during 2015-2019 in Pakistan, with over 100 million coming in the last year. Between 2020 and November 2022, that number was just 63 million.”
Senior journalist Afia Salam shared her insights with The News. When asked if its competitors like inDrive and Yango pushed the company away, she added, “Careem came here from the Middle East. Now that cheaper options are available in the market, it is plausible that they may have made [Careem] non-competitive.” “[Careem] had newer and bigger cars and a proper service network so obviously the margins must have shrunk. From the comments on social media, I can see more women dismayed than men as they felt it was a safer option than the others operating in the market.”
In response to The News’s request for comment, Careem spokesperson said: “Due to tough market conditions for the Pakistan ride-hailing industry, the difficult decision has been made to deactivate the Careem Rides services in Pakistan as of July 18. Careem Technologies remains deeply committed to Pakistan and will continue expanding as a talent hub in Pakistan, powering the Everything App across the region.”
Post the entry of inDrive, Mutaher explained, “Careem was in a severe crisis. Careem’s trajectory over the last few years confirms that Careem Rides has metamorphosed into Careem Technologies [Super/Everything App] where the company is focusing on food, especially in the UAE, which is its main market.”
Mutaher added that UAE-based e& (Emirates Telecommunications Group Company) has invested around $400 million in the Super App.
