Only weeks before its highly anticipated IPO, Uber announced a $ 3.1 billion deal to acquire one of its largest competitors in the Middle East, Careem.
Although Careem will continue to be an independent brand, Uber will acquire key insights and technology that the company has developed over the past seven years.
Mudassir Sheikha, founder and chief executive, told Insider Business in February that the trench carved by Careem would be difficult for a company from the West to easily overcome. Sheikha explained that certain things that West companies take for granted – such as ubiquitous credit cards or even Google Maps – do not always exist in the countries where Careem operates.
"As well as creating a mapping infrastructure, we had to build our own place database because Google was not complete or reliable," said Sheikha.
"Neighborhood by neighborhood we have actually entered our cities and mapped every building, every villa, and every shopping center to provide the right location for pick-ups and leaks."
Read more: tCareem has mapped 45,000 miles of way in his bid to compete on a global stage
Cash is still a king in the Middle East, but receiving hard cash in return for rides is more complicated than it might seem.
"Money may seem like a simple option in the app, but to enable it on a scale it needs a lot of work," explained Sheikha.
The company allocates credit limits to captains (its term for drivers on stage) based on their stage driving history. The limitations that determine how much money one driver can collect before having to cut the company break. Then Careem algorithm can prioritize credit card tours to let the accounting work out for commissions.
Drivers can also arrange a visit to move cash, in a move that could anticipate Careem's plans to enter the payments and payments space, a huge industry in the region.
Given that Careem has had an innovative experience of traveling in the region, it makes sense why Uber would want to buy the competition rather than try to compete.
"Although a global player doesn't come in and start providing a service to the 2% to the top 3% of the population is difficult, they're used as convenience," he added. Sheikha said. "But as soon as you start to get down the masses, you need a lot of tailoring."
For example, "Uber took nearly 2 years to realize that there are very few people in this region who have a credit card," he said. "That's very basic thing. It's 101 in this region."
In an email to Uber employees late on Wednesday, CEO Khosrowshahi said that Sheikha's friend was "entrepreneurs of the first class" with truly amazing products.
"Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower waiting times, expand new products such as vehicles and high payments, and accelerate highly innovative innovation in the region" he said. procurement.
"It's a great day for the Middle East, for the region's thriving technology sector, for Careem, and for Uber."