Uber may end up acquiring Rival Company Careem

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Uber and Careem Online Taxi Rivals to merge after multi-billion dollar deal, Careem has advanced with operation in over 100 cities in 14 countries. Careem is backed by Al-Waleed bin Talal investment firm and Japanese-based e-commerce company Rakuten.

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The Spokespersons from both companies are hesitant to make any statement regarding the deal.

Careem is a startup company co-founded by Mudassir Sheikha and Magnus Olsson in July 2012, while starting as an online service for corporate car booking, it eventually emerged as an everyday taxi service. The company has evaluated at $2 billion as of 2018.

On the contrary, Uber was founded by Garrett Camp, a computer programmer and the cofounder of StumbleUpon, and Travis Kalanick in 2009. Its headquarter is located at San Fransico. Uber offers services including peer-to-peer ridesharing, ride service hailing, food delivery, and a bicycle share system.

It is anticipated that in the long run, the merger might have a negative effect on drivers, as the acquisition would reduce their number and restrict their working condition. Moreover, the merger can create a sort of Monopoly, which would limit the freedom of competition.

Uber and Careem have faced their fair share of criticism in the past, both faced heavy criticism in Egypt at the beginning of 2016 by local taxi drivers for operating without official taxi license.

The deal is still in the decision phase and will most likely be announced by Tuesday next week as the agreement needs to be shared with all the shareholders. Uber is expected to publicly file for an IPO in April, that could value the company at as much as $120 billion.

Bloomberg has reported, citing sources familiar with the matter. Uber will be paying $1.4 billion in cash and $1.7 billion in convertibles according to the report (H/T Omar Kassim).

Read more: Uber Is in Advanced Talks to Buy Mideast Rival Careem: Bloomberg

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