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Why Did Uber Spend $3.1 Billion On A Middle Eastern Rival?

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After Uber’s disastrous IPO, 2019 proved to be a rough year for the ridesharing giant. But there was one bright spot for Uber - its $3.1 billion acquisition of the Dubai-based ridesharing service Careem. Acquiring its former competitor gives Uber a major win in the Middle East and North Africa region, where Careem has gained a loyal user base thanks to its deep knowledge of the local market. 2019 was a rough year for Uber. First there was the disastrous IPO, where the company's share price declined straight out of the gate and never recovered. Then came a string of gigantic quarterly losses, leadership shakeups, and layoffs,further rattling investor confidence. But a mere month and a half before things headed south, Uber announced a major acquisition, paying $3.1 billion for the Dubai-based ridesharing service Careem, giving many investors hope that the Middle East and North Africa could represent a major growth opportunity for the company. Careem's deep knowledge of the local market has helped it gain a loyal userbase of 33 million, and allowed it to expand into 87 cities in 14 countries, including places like Iraq and Palestine, where Uber previously had no presence. Now, Uber is projecting profitability by 2021. If it's going to get there, Careem and the greater Middle East and North Africa region may have an important role to play. » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: https://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC #CNBC Why Did Uber Spend $3.1 Billion On A Middle Eastern Rival?
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Text Comments (612)
k Tripathi (2 days ago)
Simple reason..... Muslim Brotherhood..... Period
Muhammad Arslan (3 days ago)
4:30 who the hell told you that women driving is not allowed in Pakistan??? ... I am from pakistan and females drives here. first prepare your script then make a video
Nur Ellysa (21 hours ago)
She was talking about Saudi 🙄
ArabicMusicLady (4 days ago)
This is NOT a Middle Eastern company. The founder is a Pakistani. And Pakistani people are South Asian NOT Middle Eastern. And Pakistan is a South Asian country NOT a Middle Eastern country.
Catelyn Silverine (5 days ago)
they've seen the economy rising in the east and there they go attacking hahahaha
fispen (10 days ago)
No dear, that’s not right you can check my Instagram @yazanessa and make sure
Ali Khan (11 days ago)
Why is uber not buying lyft?
bas00m64 (11 days ago)
I used Careem while in Egypt and Dubai and honestly waaaaaaaaaaay better than Uber !!!!
Wael Seifeddine (11 days ago)
130+ cities !!
Wassim Ajili (11 days ago)
in north africa has neither careem nor uber XDD we have taxies.. at least here in tunisia, and i don't think that uber or any app/company can beat the good cheap taxies we have
Uzair Ahmad (11 days ago)
No1 in UAE uses careem cuz it's so damn expensive. By law careem can't be cheaper than gov owned taxi companies
Mohamed (11 days ago)
As a start up in a similar market like middle east or africa your videos are so useful to watch , thanks for creating such a content!
Mozzinator (12 days ago)
Things that needed to be clarified here. 1. No, the narrator never said that women in Pakistan couldn't drive. She was talking about Saudi 2. Pakistan IS NOT A MIDDLE EASTERN Country. 3. Pakistan has Higher Wireless Broadband speeds than It's Neighbor in the east(India) according to Ookla and Open Signal with 76% Teledensity. With one of the cheapest data rates in the world.
Lift us Up (13 days ago)
As a Pakistani, number of Uber rides I have done till today: 2, Number of Careem rides: 50+. Also, this takeover gave Pakistan its first tech billionare. Careem cared where Uber didnt, its the tiny things which made Careem Popular. P.S. I also had my first female cab experience from Careem (although it was forgettable :p)
Muzamil Ahmed (13 days ago)
Why Careem succeeded? Ans: Understanding the local problems.
Adnan A (14 days ago)
These big companies keep trying to crush all competition with acquisitions
Khalid Khan (14 days ago)
You spelled Pakistan as Middle East...weird.
Murmad Man (14 days ago)
Stared by a Pakistani female
noorijanze (14 days ago)
It is still cheap to buy maintaining and pay parking fee than Uber or Careem
Mouad ASRI (15 days ago)
Careem is very expensive in morocco i prefer taking a regular taxi
SC 03 (15 days ago)
Mom: Never get into a stranger car You: UBER
Mirza Uwais (15 days ago)
If possible Buy Ujra Taxi Service under Uber in Saudi Arabia
wethebabies (15 days ago)
you misqouted that womens are ban on driving car in pakistan
fazal khan (15 days ago)
We proud of you careem being a Pakistani
SAAD HERO (15 days ago)
no one talks about it here in kuwait
Dino Rossi (15 days ago)
American strategic engineering and capitalism
Neeraj Nair (15 days ago)
Why does the CNBC reporter look so similar to Monica Hall from #Silicon Valley
Anas Salamah (15 days ago)
The founders for careem are: Mudassir Sheikha Magnus Olsson Abdulla Elyas I don't know why you bluntly skip the third founder who was setting in that photo next to the two other ones.
Shawn Brookins (15 days ago)
While I like the idea that these companies are providing new jobs opportunities, I also hope they decide to go green because there's a pollution problem in the Middle East that won't be resolved by more gas guzzling vehicles on the road. Also, ride sharing is great, but really high speed rail system would probably also help alleviate the traffic woes many of the people in this region endure. The US will end up having this same problem as people flock from the North East to the south and west looking for new job opportunities. Urban sprawl will precipitate traffic crawl! We need a combination of both publicly funded light rail and better traffic patters, lastly "car free" city centers where more walking, and biking is the primary mode of transportation. This will both reduce the carbon foot print while promoting health.
TheFourthWinchester (16 days ago)
Uber will sell this off in a few years.
yung sav (14 days ago)
TheFourthWinchester no
jalabi99 (16 days ago)
0:10 * employees
ҳҲ̸Ҳ̸ҳ (16 days ago)
does ISIS also take careem in Iraq when they decide attack a city ? or did turk army take Careem while attacking Kurd fighters ?
Skull Crusher (16 days ago)
The heck, pakistan never banned women from driving, kindly get your facts right, i wonder what else is wrong in this video.
adukuttan rocks (16 days ago)
More Careems ? Not without the necessary educational infrastructure you won't, the guy who built this thing was educated and trained in the US. Not in Pakistan, Not in Saudi, Nowhere in West Asia.Period.
Shlomo (16 days ago)
7:55 where is that?
Grim Soul (16 days ago)
Uber had 3.1 billion dollars to pay for this but they can't pay their drivers a living wage. All eCommerce drivers are contract drivers. No benefits no safety net no nothing.
Ishan Sha (16 days ago)
Why did uber offered 1 trillion to a mysterious taxi rival call Fake Taxi...?
Waladoopa (16 days ago)
guys I have a question could not uber sue careem for copying their idea, thanks
mzamroni (16 days ago)
are they making profit?
Fantasy Sehun (16 days ago)
Uber sucks. Careem is far better because careem understands what annoys the people most. Although rates are same
ege (16 days ago)
Because CEO has a middle eastern background.
Danny_YT (16 days ago)
WTH Pakistan is not in middle east 🤦‍♂️🤦‍♂️
Mozzinator (12 days ago)
I really try avoid the Americans' Geography jokes but it's videos like these that makes it really hard for me to do it
Fantasy Sehun (16 days ago)
Yeah but it's a major center of Careem where it makes the most revenue among muslim countries.
Wan Amir (16 days ago)
If you can't compete why not take a portion from their profit by securing stock 🙃
ItsMuff (16 days ago)
3:59 the company literally says 'better than uber' and now they're getting bought by them.
Danny_YT (16 days ago)
Honestly Careem is better then uber, they give you reward points and free rides and good discounts!
Abdullah Khan (16 days ago)
Really like how intuitive the careem app is, it's like iOS of ride hailing services. Plus careem has recently been the game changer in Pakistan by creating so much employment. It's service compared to uber is very well placed and shows careem extensive research and understanding of local market and needs. Scams in careem are just not a thing. It also checked all boxes related to local customs e.g woman captains etc It also lets you top up your mobile credit right from the app and so much more. It seems true that careem will become the one stop shop of Pakistan and it already is. Uber on the other hand is lacking behind due to issues such has lack of good service overall which i believe is because of lack of understanding of local needs and how people here go about things. Peace
Pop_ Eye (16 days ago)
I am from india,I like using uber but only disadvantage is no immediate tech support.
Farah Grants (16 days ago)
Uber was great here in the middle east until their prices became sky-high and they stopped issuing promo codes.😅 It’s not as popular anymore and neither is Careem.
Oscar Guell (16 days ago)
hey what about GRAB in Asia???? do something similar with that
L (16 days ago)
Perfect! Won’t be selling my shares after all.
Will Mcloughlin (16 days ago)
I live in the UAE and Careem is a poor service. It’s about 3-4 times more expensive than normal taxis, and you wait longer.
Shoshana (16 days ago)
Wouldn't it be easier and smarter to just sell Uber to Kareem?
Fantasy Sehun (16 days ago)
Yes! There are some big rumours may be true that UBER has bought Careem in Pakistan. And both have same prices right now in Pakistan but the ease and facilities of app vary. Most people still prefer Careem probably because it shows exact amount on the app they gonna charge and the drivers are so happy with Careem.
Saad Ali (16 days ago)
Careem wants to become every thing in our lives and. That's not ok
Samatar Mohamed (16 days ago)
It is going to fail because of it.
Anam Hamid (16 days ago)
🇵🇰
Dru N (16 days ago)
I hate dara's face
Optic500 (16 days ago)
Uber's worst nightmare would be amsterdam lol bicycles rule supreme
Zeeshan Niazi (16 days ago)
Careem should have collaborated with South East Asian or Chinese company... North American companies already have monoply on much of the internet.
Mamiya Phan (16 days ago)
Uber and Lyft is the next Wework.
Arief Rakhman (16 days ago)
Same story with Uber South Asia merging to Grab
VideoJunkie (16 days ago)
Palestine? Wheres that? Inside israel? Theres no palestine anymore. Just the city Gaza. Just google it in google map and tell me if you see the word "Palestine"
arabian satan (14 days ago)
Be quite please, thanks.
Anthony Barnes (16 days ago)
Where did the 3.1 bil come... oh this is why they aren’t profitable
Clorox Tree (16 days ago)
Kareem is not really Middle Eastern it was founded by the son of immigrants whose from Silicon Valley . He made his big bucks in Silicon Valley then saw an opportunity in the Middle East and founded Kareem so both companies were literally born in the same place and now they're the same instead of competitors
Ndar (16 days ago)
Are they doing what Grab did to them in southeast asia?
Pranesh Umashankar (16 days ago)
Any Oman/UAE peeps here excited to see Ruwi and Corniche in the video?
Fighter Jet 1 Yt (16 days ago)
Yalla lol
Filium (16 days ago)
Lol lyft is best
saksham katyal (16 days ago)
5.02 that lady looks like Amanda Crew - Monica from Silicon Valley show
snowy lynx (16 days ago)
Hong kong is in nearly open rebellion and this is what you report on?
Jazz E (16 days ago)
Super Apps == "the operating system for our every day lives" Interesting conclusion. New perspective.
DashFlash (16 days ago)
Next thing we know, Uber’s going to buy Fake Taxi. I mean, I wouldn’t be against it.
Arsen Charly (14 days ago)
sounds like escort with less steps
ً‎‎ًYuyuko (14 days ago)
i would doubt
Duran (16 days ago)
Uber was forced to do this deal at this high price by the saudi royal mafia who technically owns big chunk of both companies.
Duran (16 days ago)
A fact about the strategy of the saudi royal mafia > This barbaric mafia doesn’t care about how much money it looses. It cares much more about linking its fate to the American economy, businesses and politicians. If the saudi royal mafia goes, the US economy and many American businesses would get hurt badly.
sasuke dad (16 days ago)
how the hell did uber spend 3 billion dollar when they supposedly aren't making a prophet.
you're right and I'm wrong but, (11 days ago)
@ᴅᴇᴀʀ ᴍʀ. ɪꜱᴀɪᴀʜ ᴅᴇʀɪɴɢᴇʀ; Lmao
ᴅᴇᴀʀ ᴍʀ. ɪꜱᴀɪᴀʜ ᴅᴇʀɪɴɢᴇʀ; (13 days ago)
few companies make prophets these days.
barry williams (16 days ago)
That's the thing they basically take the profit they make and reinvest it into the business for future growth like buying Careem and then they write it off as a lost on its taxes. I've worked in many corporations and they all do it for taxes write offs
Momin Hasib (17 days ago)
Woman's are never banned from driving in Pakistan. Get your facts straight !!
Momin Hasib (13 days ago)
@Ali Abdullah Pakistan always get degraded. They never shows 99% of Pakistan which is good.
Ali Abdullah (13 days ago)
I'm sure they were referring to Saudi Arabia there since it's true there
Muneeb Iqbal (17 days ago)
Why do companies go public?
GTgroup (17 days ago)
Uber is only benefitting from high cost transport country, thats make it less innovation . . While in SEA where people cant afford high cost transportatuon, the ride sharing company making a lot innovations . .
Michael Choe (17 days ago)
If you can’t beat them, buy them.
sanjuansteve (17 days ago)
Uber's percentage of the fees/profits should be regulated to not be abusively high, leaving the drivers with only the scraps.
Kilo Juliet (17 days ago)
Rubbish app. Fact of the matter is that, it just worked out out because it takes a different cultural approach to deal with these diaper heads!!
ভাইসাব Bros (17 days ago)
The west will tell you that the women are happy now because they get to drive the car but in reality women now have to work which actually degraded them and their dignity. By following the western lifestyle women have humiliated themselves Smh
Deniz Önal (17 days ago)
I think Uber got banned in my country.
Shady Azzam (17 days ago)
Dominate the market but make people think that they have a choice!
Ali Abbas (17 days ago)
I work as captain in careem in Iraq and I like it
Adnan Kazim (17 days ago)
I can tell you guys going to pakistan from time to time before this acquisition EVERYONE hated uber. Everyone used careem, they were cheaper and drivers were MUCH better. There are careem offices everywhere in Karachi. This was shocking news to me!
Timon (17 days ago)
Uber sux, I will stick to Yellow Cab.
An Y (17 days ago)
Larger Market And Diversity
Ahsan Arshad (17 days ago)
Foreign companies always have problems in these countries so mostly they do is to buy the competition...i say it's a good move for them but not for us consumers...now they can decide what fair they are going to charge but don't worry we still have choices of taking a bus or a rickshaw which aren't affiliated with these apps
Saima Baig (17 days ago)
Careem was too good but Uber killed it.
Nazim Ud Din (17 days ago)
Your source is wrong Careem is a Pakistan based company.
Mozzinator (12 days ago)
One of the founder is Pakistani but company is based in Dubai
Haider Zaidi (14 days ago)
No its Dubai based
paul clark (17 days ago)
How can a company that loses money spend 3.1 billion? They wonder why financial markets collapse. It's like they do this to make sure recessions occur on a regular basis so the banks can make a fortune.
Vinyas Bhat (17 days ago)
we live in a world where only rich can bcm even richer...Man who has more money to burn wins the business game..
Alastair Hewitt (17 days ago)
4:20 it's pronounced What's up and it would be great if we had that option in the US.
aamiriqbalh (17 days ago)
There was never a banned in Pakistan for women drivers .. stupid still, its really nice to see a Pakistani guy created this big, we have very few examples to show the world but progressing
Vinyas Bhat (17 days ago)
thats the path wr both india & Pakistan should complete (Business & technology)... Rivalry is good if its about growth..
Md Slm (17 days ago)
8:35 bots now talk like humans
Mohammad Khan (17 days ago)
The master mind of careem is Pakistani. Way to go Pakistan!!!!!
TheFourthWinchester (16 days ago)
@Arian Orange😂😂😂
Arian Orange (16 days ago)
Good choice of words, Pakistanis are indeed great Master Minds........
NC Styles (17 days ago)
I can’t believe a taxi company is worth so much. Lol They came along way.
Chansai Commerce17 (17 days ago)
AWESOME
Bagas Andita Setiawan (17 days ago)
they lose badly in SEA. There are already 2 superapss
Arief Rakhman (16 days ago)
Compromise, their South Asian operation joining (merging) with Grab
Bayu Akbar K (17 days ago)
2018, Grab acquired Southeast Asia's Uber. 2019, Uber acquired middle East's Careem.
ARBAZ QURESHI (17 days ago)
In which countries does Grab operates?
cynthia rouse (17 days ago)
Because it's a huge Data Mining OP? https://www.youtube.com/watch?v=y_9tfGWurMU
Jofx (17 days ago)
I dunno but didn't Grab acquire Uber???