Careem challenges Uber with a food deliver app

Careem, the six-year-old ride-hailing company based in Dubai, has raised the stakes in its competition with US tech giant Uber in the Middle East as it launches a delivery app to cover a range of goods and services, from food to house cleaning.

Why is a ride-hailing company expanding into delivery services?

The company’s internal research estimates that food deliveries in its target markets, such as the UAE and Egypt, could become a $25 billion (Dh91.81bn) market by 2022. With more than 85 per cent of food deliveries in the region made through phone calls, the company hopes to lure its 33 million existing customers to order their next meal via its new food delivery app Careem Now. The platform will initially start with food takeaways to tap into opportunities in the region using Careem’s technology and network reach. Careem Now will face competition from popular food delivery apps including Uber Eats, Deliveroo, Talabat and Zomato.

Where does Careem operate?

Set up in July 2012 in Dubai, the company operates in more than 120 cities in 15 countries in the Middle East, Turkey and Pakistan, serving 33 million customers. Careem Now will be available in Dubai and Jeddah before rolling out in Egypt and Pakistan.

Who has invested in Careem?

In October, Careem secured $200m million (Dh735m) in a new round of funding from some of its existing investors to finance expansion. That takes the company’s valuation to about $2bn, a source told

The National at the time. Careem counts among its financial backers German luxury car maker Daimler, Japan’s e-commerce giant Rakuten, China’s largest ride-hailing company DiDi Chuxing, Saudi Arabian Prince Alwaleed bin Talal’s Kingdom Holding, Saudi Arabia’s Al Tayyar Group and Saudi Telecom’s venture capital arm STV. Careem declined to disclose how it raised the $150m for Careem Now.

What other segments is Careem looking at? Careem is also expanding into mass transport and digital payments in under-served markets. The company announced bus services in Cairo before and will roll out the Careem Bus app in Saudi and Pakistan. Careem also acquired Indian bus shuttle service app Commut. In digital payments, it now offers pre-paid credit facilities for ride payments.