Uber exits five Pakistani cities, to continue services via unit Careem.

Ride-hailing services, Uber, has decides to cease its operations in five major cities of Pakistan, including Karachi and Islamabad, the company said on Tuesday in a move that will reduce market overlap between the US firm and its Middle East unit Careem.

The Uber Technologies Inc said in a statement it would also discontinue its ride-hailing services app in Multan, Faisalabad and Peshawar, adding however that its operations would continue in Lahore, where the company plans to launch new products.

The change comes in effect immediately. The company said drivers and riders in the five cities could switch to the app run by Careem, the Dubai-based company it purchased for $3.1 billion in 2019 to dominate the ride-hailing markets in the Middle East and Pakistan.

“When we acquired Careem, it was always our belief that the two companies could come together to complement each other’s strengths and better serve the region through tailored experiences,” the company’s statement said.

“In my view, they want to kill the competition in market as they both are actually the same, so Uber will manage the market with Careem,” said start-up funding expert Kapeel Kumar.

Parvez Iftikhar, former CEO of the Universal Service Fund Pakistan (USF-P) said that Uber’s exited because of intense competition – especially the competition from InDriver, whose business model was proving to be more successful.

The company invested approximately $100 million and created over 800,000 income opportunities for captains and had a customer base of 9 million. Apart from market-dominating Careem, Bykea is also running similar operations.

InDriver, the international ride-hailing service with over 100 million users worldwide, has become Pakistan’s most downloaded app. InDriver’s unique model allows passengers to negotiate fare of their ride with nearby drivers.

The exit comes amid economic crunch exacerbated by devastating floods this summer that killed more than 1,700 and caused an estimated $30 billion in damage. Uber said it would prioritise minimising the impact to its employees, drivers, riders, and partners who use the Uber app during this change.