Why Did Uber Spend $3.1 Billion On A Middle Eastern Rival?
Вставка
- Опубліковано 17 жов 2024
- 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: cnb.cx/Subscri...
» Subscribe to CNBC TV: cnb.cx/Subscri...
» Subscribe to CNBC Classic: cnb.cx/Subscri...
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: www.cnbc.com/
Follow CNBC on LinkedIn: cnb.cx/LinkedI...
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Instagram: cnb.cx/Instagr...
#CNBC
Why Did Uber Spend $3.1 Billion On A Middle Eastern Rival?
“Making consumers THINK that they have choice”.....hmmmm
*cough* Coka Cola
Even the taxis in the UAE can be ordered via Careem so yeah there really isn't a competitor at the moment.
Corporations cares about you.
Oppo, one plus, vivo, realme etc are all the same company
@@ferminmorales6564 the national taxies are much cheaper in UAE.
It's Uber. The financial part doesn't need to make sense.
at least they pay the employees who create the app
Everyone wants to be Amazon. Hemorrhaging money till recently. That's why the super app not only ride sharing.
Yeah, you are right with this.
Oh hello in Pakistan women is driving since independence.
Don't try to slick .
Saudi Arabia is tottaly different then Pakistan
For all the people who don’t know Arabic
Kareem(Careem) means Generous
Thank you my G
Careem abdu jabbar
محد سالك
I’d like a Kareem (Careem) daddy
Casey I think I got your joke
Why Careem succeeded?
Ans: Understanding the local problems.
The Careem logo is very good. Hats off
There was never a ban of women driving cars in Pakistan. Please get your facts straight!
4:33 she didn't say that , go hear that again
It was the wording messed up
This is what they did with all the money they cut from drivers pay.
@Amusis why would your motivation be to comment this
Don't get me wrong, but I'm genuinely confused. Uber is something a new phenomenon, prior to that people had no option to offer riding services.
Why do you think workers have a right to demand higher pay? If you believe Uber doesn't pay enough, simply don't do it! You didn't have that option couple years ago!
@@RandomGuy-nm6bm because ride share services are circumventing labor laws by abusing contractor law
@@Zer0-0 yes, yes we did. Apps didn't change the world, just exploited it.
Lol
I`m from Iraq and Careem app is really good! specially when they make a discount offers ALOT!
Ayoosh Shawki no careem here in 🇺🇸 good for you guys !!
Good for the rider, and probably just as bad at paying it's driver like Uber, doomed to fail.
@Digong DU30 Grab and Gojek are so far ahead than Careem in many ways. I use Grab on a daily basis it's a lifesaver!
Digong DU30 i don’t think so, since i’ve tried grab in asian countries like Malaysia and Thiland it offers ride with such low prices!
Alfonso G
3yoshfinity
How does a company that doesn’t have any overheads and takes up to a 30% commission still not make huge profits?
Lawyers, lobbyists, lawsuits , undercutting. Simple
Try up to 80% now mostly 50% the norm.
Because there a unregulated Company , most companies that can't treat employees and drivers right and follow the laws , will never make a profit ,
*Uber is profitable in the US and a few European markets. However, overall the company is not profitable, as it's running its business in losses, because of the competition. In almost every country Uber is in, there is a local version of Uber in that country. So the competition is quite fierce. India is Uber's largest market outside of the US. And they face a fierce competition from Ola, a local Indian company. Uber will be profitable in a 2-3 years' time, as it leaves the unprofitable markets, such as China, Russia, Southeast Asia, and enters/increases other businesses, such as Uber Eats and Uber Freight. Uber is here to stay. It will be a globally profitable and a over $100 billion company in about 5-7 years' time. If you are an American, this is a good time to buy Uber's stock and keep it for the next 5 years. You will thank me later! :)*
Stephanie Hale is it a guess or something based on facts ?
More than half of the clips were from Pakistan - Karachi
@Valhalla Indians at it again. Hating for no reason. What a good image you give to the world lol
Ammar Abbasi my name is Ammar too 😃
@Jake Bastinthere are 1.3 Billion of them, So it's pretty safe to assume that when someone is spewing Hate for Pakistan he/She is most likely an Indian.
@Jake Bastin agreed with mozzinator, but also that word is used by Indians. I don't know what they think, like pork is our kryptonite or something 😂
@Valhalla Indian origin probably
Correction : Women were never ban in Pakistan to drive a car.
Yea I'm an Indian and I know it quite well
She was talking about Saudi Arabia not Pakistan...
How do u know
They are banned from getting out of four walls at a family level..
But PKMKB is permanent
Women were never banned to drive in Pakistan. Get ur facts right
The said Saudi Arabia
@@MortiVR Are you insane? Who are you talking about?
now now no trolling peeps
@@MortiVR What are you talking about? If you have a source for this, please send it.
Cnbc = fox news
Money is no issue for any company from the USA. They can always print it
Edible Bird's Nest you don’t know how companies work do you
@@neondiddle2039 and you don't know how fed works do you
Edible Bird's Nest oh wow. You’re wrong again. The federal government can not print money, that comes from the US Treasury. All the fed does is distribute said money after its printed. But in either case. A COMPANY. CAN NOT. PRINT. MONEY.
So they choose to be bankrupt uh yeah okay
Hmmm. Definately am not American but plenty of incidence of Fed bailout in the past. So my comment is still relevant When it become too big to fail.
It happened in the past.
Next thing we know, Uber’s going to buy Fake Taxi.
I mean, I wouldn’t be against it.
i would doubt
sounds like escort with less steps
You know I have to say it but Pakistan is not in the middle East. We are part of subcontinent , thus making us south Asians .
Just gotta put it out there, because turns out many people failed world Geography in school.
@Murmad Man I'm a Jatt aka ethnic Punjabi. Both sides even Indian Punjabi Sikhs don't consider them South Asians. We are Iranic group
If I'm not mistaken, Pakistan and Afghanistan are what was traditionally called the Middle East, with places more to the west and thus "near" Europe being called the "Near East". Calling Iraq, Syria, Palestine, and the Gulf countries "Middle East" is very recent and not universal: German, for example, still uses "Nahost" (literally Near East) for the region.
Hamzahghazi no one cares bro 🤷♀️
@@Napstone sure my guy sure
@@blackflagsofpakistantheeas9109 South Asia is a geographic region regardless of how you define yourself.
CNBC we thank you so much for great free content in a day and age like today.
These days everything is subscription. No doubt someday UA-cam will beat every streaming channel when data price is affordable.
@Digong DU30 who else puts out informative 10 minutes videos like this? Vox. Great big story....
I don't see them stealing..
Its a segment. Thats like saying the NBA copied the NHL and started to televise games.....
Mom: Never get into a stranger car
You: UBER
they have monopolized rideshare and made it very expensive in dubai, consumers hate them and want more competitors in the region. Indrive, bolt where are you please!!
careem has the best service as compare to uber in Pakistan. the customer service is the one of the best in the Pakistan
4:30 just clarifying, women were only banned to drive in Saudi Arabia. Not in Pakistan.
Pakistan is a democracy with 33% of women in the work force. We do need to improve to 50%. That'll take time.
Learn grammar @ CNBC. Your sentence structure *implies* Pakistani women couldn't drive as well.
Who says that the workforce needs to be 50% female? What if some women don't want to work?
@@StewartLucrative Well that's true but in Pakistan there are more women then men. So demographically I believe at least 50% should be women in the workplace. Recently, world bank did a survey, they put it that way.
@@saqibmudabbar no
It's a great deal for Uber buying market share, but allowing a local customer experience to prevail, which is what digitisation is all about. Both parties can leverage and learn from each other and this internal ecosystem will make the group stronger.... when you scale you automatically reach for process driven frameworks, but you need to retain that individual flair for local market knowledge... this deal has that structure both customer groups who travel know who they can reliably do business in different regions and continents because it's underwritten by the same core value experiences.
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!
CNBC : "Women were banned from driving cars in pakistan"
Me : *NANI??*
They are high probably
She was refering to Saudi Arabia.
Referring to Saudia not Pakistan.
This comment is too funny
They bought stocks to avoid taxes and solidifying they standing as a world wide market this is a smart move.
Women were never banned in Pakistan. Poor reporting.
Mr Lad I believe they said Saudi Arabia, not Pakistan
Listen again.
Pakistan has never banned women from driving..
Lol women were never banned from driving in Pakistan. Stunned at how little research CNBC do for their documentaries
Women were banned from driving in Pakistan until mid 2018?!!! Get your facts correct. Women have been driving in Pakistan since the birth of Pakistan.
I still hate Uber for leaving the SEA market and leaving us with Grab. Grab’s monopoly on the market’s hurting everyday consumers who rely on alternative transportation providers especially in cities like Manila where there is no reliable transport option. Zero competition means zero innovation.
I think that cream should stay to keep their company and stay where they are and strive and create. That's what they should do don't sell out stay stay strong with your endeavors.
If we take Careem as an example you can make an assumption of what will happen next with Uber. The Uber brand will push into Latin America and Sub Saharan Africa. They'll then acquire other companies, similar to Careem. Such as Grab in southeast Asia.
Who knows, in 20 years Uber could be exclusive to North America and Europe whilst a collection if other brands tailored to their respective regions exist everywhere else. It's an idea that may one day come to fruition. Lyft will continue to be in a distant second place.
Wow I thought Careem and Uber were competitors, because they both operate here in Dubai. And provide slightly different experience I think
are they making profit?
How many McKinsey employees are founders now???
The Careem's logo is so cute though :D
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
"...in places like Pakistan and even Saudi Arabia where women were banned from driving till mid-2018..."
Clever wording implying that women were banned from driving in Pakistan as well whereas that was never the case, it was only in Saudi Arabia. I thought that should be made clear.
How the hell you have losses and by a company for 3 billion
Khalid Ibn Alwaleed lets go with facts. It’s because the company is funded by angel investors.
They didn’t pay for it with cash. They paid with Ubers stock.
They don’t have losses, they’re just using money to expand. They want to be say they’re unprofitable, Thats how they keep themselves from paying shareholders. Think about it. If they’re not profitable, where is this 3 billion coming from, last quarter profits?
Brilliant video and great research! Thanks for this video CNBC!
These reports by CNBC are extremely interesting. Excellent stuff!
I know Karim Benzema
this is why they cant pay their drivers.
Pay me well
4:30 Women have never been banned driving in Pakistan
Yeah, she was talking about Saudi Arabia but she phrased it wrongly, made it sound like she was also talking about PAKISTAN.
WTH Pakistan is not in middle east 🤦♂️🤦♂️
Yeah but it's a major center of Careem where it makes the most revenue among muslim countries.
I really try avoid the Americans' Geography jokes but it's videos like these that makes it really hard for me to do it
I'm Arab and I'm happy and proud that a service that's needed in the Arab World is being provided. We need to take advantage of our demographics, our highly educated population and growing market for the internet/internet connection and continue with entrepreneurship and technological advancement. Business is in our blood.
CNBC, great video! Enjoy your Tuesday! 💯🙏🙌
Correction they meant Saudi Arabia for banning females from driving not Pakistan. It's wasn't explained well. Just listen twice you will get it.
These big companies keep trying to crush all competition with acquisitions
Of course this Deal makes sense but the numbers don’t!
So Careem wants to become something like Wechat?
LazyAntCrazy that’s exactly what I thought
Yup
Wechat has more options than any other such APP .... like didi, food, movie tickets , bank transfer , wallet , payment at shops ..... since alipay and wechat payment we barely keep any real cash with us here in china
@@nomikiyani2732 And that is scary af, The gov knows exactly how much money you have and where your money is flowing to
LazyAntCrazy yes. This is their plan of Big Data ..... here in China no matter where you are, you are being constantly monitored and your purchase habits also reflect your behavior and on the bases of it your scored are created , like buying household and groceries reflect good scores, buying alcohol reflects bad habits and low scores
Perfect! Won’t be selling my shares after all.
A lot of big companies are just big for nothing.. they can't even make money at all
That literally makes no sense are you stupid?
Yes I am...
That's business strategy. No profit they keep on investing and try to create Monopoly in different regions. Otherside they cut tax too. Even if company doesn'take profit they have networth.
It's only the liberal new companies , that can't make profits
@lemon diesel there's plenty of companies that make profits in the United States and employ people , Walmart, Target , bestbuy , Procter and gamble , list goes on and on , there's hundreds if not thousands of companies that makes profits in the United States,
Uber, despite what the interviewed guy said, corresponds to the most used ride sharing company in Latin America, beating taxis too.
P.S. I’m from Goiânia-GO (Brazil).
Monopoly 101, the game is rigid since at least ww2.
Excellent reporting 👏🏼
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.
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.
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.
Careem is a Pakistani company HQ'd from Dubai. Another Pakistani digital platform, daraz has been bought by Alibaba. Ecommerce is transforming the Pakistani market nowadays with the younger population shifting from use of cash to credit/debit cards. This is significant for Pakistan since it means more money flowing through banking channels and hence, leaving a money trail.
Just to be entirely accurate, daraz was started in Karachi, Pakistan but by the German company Rocket Internet
Lol when women banned to drive uber in pakistan😂
@J C There was No Pakistan back then.
She was refering to Saudi Arabia when she said that.
@@arbaz79 ah!! I get it. Ty
ARBAZ QURESHI if I’m not wrong women’s were able to drive cars in Saudi Arabia since 2017
Fun fact - Saudi Royals are one of the biggest investors in UBER 😅
The Saudi government is invested in almost everything. Other than we work they played their cards right
Since MBS came into power,the saudi sovereign fund has invested around $60bn in the Silicon Valley.
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.
Where did the 3.1 bil come... oh this is why they aren’t profitable
What a terrible investment made by Uber! You must understand the strong desire for everyone in the Careem market to cut out the middleman! I expect this has killed Uber of ever having a profit. I say run away from these companies fast.
Smart move. Careem is quite popular in the UAE
Joel Siwale Yea, speaking of UAE, Tomorrow will be a rainy day, some say it’s bad
Dominate the market but make people think that they have a choice!
2018, Grab acquired Southeast Asia's Uber. 2019, Uber acquired middle East's Careem.
In which countries does Grab operates?
Careem allows for pre booked trips as well as calling fir one when you need it.
Careem should have collaborated with South East Asian or Chinese company... North American companies already have monoply on much of the internet.
Same story with Uber South Asia merging to Grab
Ok, cool, so Careem and Uber will go down together. Btw, this whole payment thing is just copying what Grab has been doing for years in SE Asia. It's used quite a lot there.
Uber's percentage of the fees/profits should be regulated to not be abusively high, leaving the drivers with only the scraps.
Woman's are never banned from driving in Pakistan. Get your facts straight !!
I'm sure they were referring to Saudi Arabia there since it's true there
@@aliabdullah1765 Pakistan always get degraded. They never shows 99% of Pakistan which is good.
you misqouted that womens are ban on driving car in pakistan
I like his Pakistani English accent.
I Love Careem
Basically Spend all of your money to buy competition so
At the end even if you are nearly bankrupt
There is no competition
Because of no laws in middle east. No laws, no insurance, no drama. When accidents happen there will be no consequences or dramas for Uber
guys I have a question could not uber sue careem for copying their idea, thanks
Female Captains are also Captains.
U might have not noticed but drivers are not captains also
They're also female.
@@syedmohsin18 i use careem as a driver and i dont like the name captain anyway ..
Honestly Careem is better then uber, they give you reward points and free rides and good discounts!
Uber spends money like drunken sailors
Uber's worst nightmare would be amsterdam lol bicycles rule supreme
It's going to be a tech gold rush very soon in the Middle East... Big potential
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)
If possible Buy Ujra Taxi Service under Uber in Saudi Arabia
Profitability in 2021? So 12 years after it was founded?
Any Oman/UAE peeps here excited to see Ruwi and Corniche in the video?
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.
7:55 where is that?
Dubi
Saudi Arabia (jeddah or riyadh not sure)
Uber doesn't really need more streams of revenue, what they need is more PROFITABLE income streams. Anybody can make money, but only sound business can make a profit.
I am just waiting for Fake Taxi to come to my country
Except US and parts of Europe
Uber is failing everywhere
They are just opening a branch everywhere without understanding the market
In India now very few uses Uber
Everyone are using OLA cabs
Not true. My friends and I don't have a far and we rarely use ola. Mostly uber.
@Aswin Hanagal competitive for now
Ola is 10-15% ahead in terms of market share than Uber as of now.
If they don't innovate, they'll be gone sooner or later!
@@uj256 I said "very few"
Most people prefer Ola over Uber
3,1 billion...nice work
Women were never banned in Pakistan. Bringing Pakistan up with Saudi makes it confusing!
i am gonna do a research in my university on careem users in pakistan
Great investment?? what do youguys think?
Yo, this is insanely funny to me, I ditch caream drivers all the time😂😂😂
Uber should allow cash option in the US. I’ve used Uber cash in Egypt then I used Kareem and I found it a lot cheaper so I stopped using Uber there 🤷🏽