Customers worried Uber's 'purchase' of Careem will lead to higher prices

A deal between the two ride-hailing apps is expected to be announced next week

A customer displays the Careem Inc. ride-hailing app while booking a car in this arranged photograph in Islamabad, Pakistan, on Tuesday, Dec. 12, 2017. Ride-hailing company Careem plans to expand across as many as 30 new cities in Pakistan as it taps into the country's growing middle-class. Photographer: Asad Zaidi/Bloomberg

Dubai residents are worried the potential purchase of Careem by rivals Uber could mean higher prices for passengers.

Uber is said to be close to finalising a deal to buy its Dubai-based rival for at least US$3 billion.

Base prices for the two services are similar, although their peak rates can differ, while the companies typically compete with special offers for customers.

Customers said they want to see more, not less, competition in the industry.

“I think a reduction in competition will only lead to fewer savings for customers,” said Cheri Smith, 36, a training manager from Scotland.

“Uber offers fewer discounts than Careem, that is why I use Careem much more."

When someone has a monopoly they can charge what they want

A source told The National on Monday that Careem's brand will remain for a period but will eventually disappear as the operation will become Uber.

Careem user Jennifer Wynne, 35, an Irish expat in Dubai, said that a merger between the two ride-hailing apps would lead to a less appealing service.

“I don’t use Uber because of bad experiences with cancellations and prefer Careem because I think their customer service is better,” she said.

“I am expecting the quality of the service to fall now to match what I have experienced from Uber."

Ruth Coleman, a financial adviser, also said she prefers Careem and has used the service first it began.

She has "not been impressed" on the occasions that she used Uber instead.

“I have had issues like the drivers always cancelling and saw no reason to switch from Careem,” she said.

Not all customers agreed.

Uber user Aaron Sutton, a graphic designer, said he switched a few months ago in search of better prices.

But he said that the lack of competition would impact on the quality of the service.

“When there is competition in the market it leads to better prices for customers,” said the 30-year-old, from Ireland.

“When someone has a monopoly they can charge what they want and there is no incentive to maintain the highest levels of customer service.”

An official comment has yet to be issued by Uber or Careem about the planned purchase, first reported by Bloomberg on Sunday.