American ride-hailing company Uber is reportedly in talks with Careem, its biggest rival in the Middle-Eastern market, to combine operations through a merger. Discussions are still at a preliminary stage and the details of any deal are still to be worked out, according to a report by Bloomberg.
The report further suggests that Uber is likely to either buy Careem outright, or hold more than half of the ownership of the merged entity, as Uber no longer wants to sell outright its business operations in various parts of the world. Uber recently sold its operations in South East Asia to rival Grab, and also sold its China business to Didi Chuxing in 2016.
Recent reports also suggested that Uber could merge with its biggest rival in India Ola, but that deal has not yet taken place. Uber’s global rivalries have been an expensive affair for the company, as it has tried to win customers by offering big discounts and incentives at the cost of its own profitability. This potential merger between Uber and its biggest rival in the Middle East will help it end what has been an expensive rivalry in the market.
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The report further states that Uber could retain control of the merged company, but may retain either the Uber or Careem brand, with Careem’s executives managing the business on a day-to-day basis. Careem operates in 10 countries across the Middle East and North Africa, and even has operations in Pakistan. Uber merging with Careem will allow the company to consolidate its position in the market as it heads towards a planned public offering in 2019.