Uber buys Careem for $3.1 billion

Uber spent $3.1 billion to dominate competition in the Middle East. 

It announced Tuesday that it reached an agreement to buy Dubai-based Careem, which operates in 15 countries including Morocco, Pakistan, Egypt, Jordan, Pakistan, Saudi Arabia, and the United Arab Emirates.

The deal was for $1.4 billion in cash, $1.7 billion in loans — and marks the biggest tech industry deal in the region outside of Israel, according to the Associated Press. 

The company will operate with its two co-founders under Uber as its own brand — for now. On Careem’s website, the company wrote, “We are still Careem.”

Uber arrived in Careem’s territory in late 2013, the year after Careem was founded. Now the two leading ride-hailing options are playing nice. 

Liad Itzhak, an SVP at Here Mobility, said in an email that the acquisition will kill local transit competition, effectively turning the ride-hailing market in the region into an Uber-owned monopoly. Uber pulled out of Southeast Asia last year and sold its business there to local ride-hailing platform Grab.

Uber CEO Dara Khosrowshahi wrote in an email to employees Tuesday about keeping Careem an independent brand operating on its own: “We decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each.” He mentioned “integrating” eventually to improve service and bring on new products that Careem offers. 

Uber is expected to go public next month with a potentially record valuation of $120 billion. Meanwhile smaller Uber rival Lyft filed to go public earlier this month and is expected to list its IPO on Friday. Lyft has focused on the U.S. market, with its only global expansion in Canada.