Careem CEO criticized Uber for mistakes in the Middle East prior to its acquisition

Just weeks before its long-awaited IPO, Uber announced a $ 3.1 billion deal to acquire one of its major competitors in the Middle East, Careem.

While Careem will remain an independent brand, Uber will acquire the key information and technologies developed by the company over the past seven years.

Founder and CEO Mudbadir Sheikha told Business Insider in February that the gap that Careem has left would be hard for Western society to overcome. Sheikha explained that some things that western companies take for granted, such as ubiquitous credit cards or even Google Maps, do not always exist in the countries where Careem operates.

"We had to not only build a mapping infrastructure, but also our own site database, because Google was neither complete nor reliable," Sheikha said.

"Neighborhood by neighborhood, we went to our cities and mapped every building, every villa and every mall to provide a precise location for transfers and stops."

Read more:Careem traced 45,000 miles of road to compete on the world stage

Money is still king in the Middle East, but simply accepting hard currency in exchange for journeys is more complicated than it appears.

"Money may seem like a simple option in the application, but to activate it on a large scale, it took a lot of work," Sheikha explained.

The company allocates credit limits to captains (term corresponding to drivers on the platform) based on their driving history on the platform. These limits determine the amount of money that a driver can collect before having to file the company's share. The Careem Algorithm can then prioritize the journeys with a credit card to allow the accounting to generate commissions.

Drivers can also make an appointment to move money, which could foreshadow Careem's project of entering the payments and remittances space, a huge area in the region.

Given Careem's experience as a pioneer in the region, it makes sense that Uber wants to buy the competition rather than trying to do it.

"For a global player to enter and start providing service to the 2% to 3% of the population, it's not difficult, they are used to convenience," Sheikha said. "But as soon as you start going down the mbades, you need a lot of sewing."

For example, "it took Uber nearly two years to realize that very few people in this region had a credit card," he said. "It's a very basic thing – it's 101 in this region."

In an email to Uber employees on Wednesday night, CEO Dara Khosrowshahi said Sheikha and his co-founder were "world-clbad entrepreneurs" with a truly extraordinary product.

"Over time, by integrating parts of our networks, we can operate more efficiently, reduce waiting times, develop new products such as high-capacity vehicles and payments, and accelerate the pace already." remarkable innovation in the region, "he said. acquisition.

"It's a great day for the Middle East, for the burgeoning technology sector of the region, for Careem and for Uber."