Dubai's Careem decides to pull out of Oman

Ride-hailing company cites "absence of the regulatory factors" for a healthy investment environment

TO GO WITH AFP SPECIAL ABOUT KARIM TAXI (Photo by AHMAD AL-RUBAYE / AFP)

Careem, the Dubai-based ride-hailing app acquired by Uber, is halting operations in Oman starting next month due to regulatory issues in the Gulf nation.

"Careem decided to discontinue operating in Oman due to the absence of the regulatory factors that provide us with a healthy investment environment," the company said on its official Twitter account in response to a query from a user on January 21, without elaborating. A Careem spokeswoman confirmed to The National that operations will cease on February 3.

The Dubai-based company first began operations in Oman in May 2017 and operated only briefly before being shut down by the government, which requested it work with local licensed taxis. In October 2018, Careem resumed services in the country after it partnered with Marhaba Taxi to register Marhaba’s drivers to Careem’s ride-hailing app. Careem currently operates in 120 cities across 15 countries, including Oman, with more than one million employees in the region.

Ride-hailing apps have grappled with regulators in many markets around the world as the traditional taxi industry protested their presence.

Uber, which closed its acquisition of Careem at the beginning of January, has faced bans in cities in the UK and Germany due to concerns about safety and competition.

Careem has retained operational and brand independence in the Middle East but becomes a wholly-owned subsidiary of the US company. Careem co-founder Mudassir Sheikha also remains as chief executive.

The closing of the deal means that Uber now owns Careem’s mobility, delivery, and payments businesses across the region, including in Egypt, Jordan, Saudi Arabia, and the UAE.

Last month, Egyptian authorities gave the go-ahead for San Francisco-headquartered Uber's acquisition of the Middle East's ride-hailing app after imposing a set of conditions, clearing a key regulatory hurdle for the $3.1 billion (Dh11.3bn) deal.

Ride-hailing giant Uber's purchase of Careem marked the region's biggest technology sector acquisition to date.