Careem's Departure Marks Tough Times for Pakistan's Digital Economy
Careem, Uber's Middle East ride-hailing arm, will cease operations in Pakistan on July 18 due to economic challenges. This highlights the strain on Pakistan's digital sector, where tech firms cut operations amid high inflation and weak demand. This marks an end of a decade of app-based transportation innovation Careem led.
In a move highlighting the pressures on Pakistan's digital economy, Careem, the ride-hailing division of Uber in the Middle East, will halt operations in Pakistan from July 18. Economic challenges, intensified competition, and capital limitations have led to this decision, concluding Careem's nearly decade-long influence in pioneering app-based transport in the country.
CEO and co-founder Mudassir Sheikha expressed the difficulty of the decision in a LinkedIn post, citing the 'challenging macroeconomic reality' and the shifting dynamics in global capital allocation. With Careem's departure, several contributions such as digital payments, app-based bookings, and increased female ridership, face a setback.
New competitors like Yango and inDrive are filling the void as they expand with low-cost alternatives. This retreat reflects a wider trend where startups in Pakistan are grappling with diminished venture capital, increased inflation, and reduced consumer spending. Similar trends are observed globally with companies like Uber and Grab scaling back in unprofitable markets.
(With inputs from agencies.)
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