Careem Announces Suspension of Services in Pakistan
Careem, the ride-hailing service owned by Uber and operating in the Middle East, has confirmed it will cease its operations in Pakistan by July 18, 2025. This decision marks the end of a nearly ten-year presence in a country where Careem helped pioneer ride-booking apps and digital payments.
Economic and Competitive Pressures Behind the Exit
The move comes amid mounting economic challenges within Pakistan, where inflation rates soared before recently easing and consumer demand weakened significantly. These factors, combined with increased competition and limited capital availability, pressured Careem to reconsider its continued investment in the market.
Mudassir Sheikha, Careem’s co-founder and CEO, described the decision as "incredibly difficult," citing the tough macroeconomic environment and intense market competition that hinder the company's ability to sustain a reliable and safe service.
The Shift in Pakistan’s Ride-Hailing Landscape
Since launching in 2015, Careem played a critical role in normalizing:
- Digital payments
- App-based ride bookings
- Increased female ridership
However, emerging competitors such as Russia-backed Yango and Latin America’s inDrive have recently gained traction by offering budget-friendly options in Pakistan’s major urban centers.
Broader Challenges Impacting Pakistan’s Tech Ecosystem
Careem’s exit reflects a wider trend of strain on Pakistan’s startup ecosystem. Since 2022, the country has witnessed a sharp decline in venture capital inflows, with many startups like Airlift, Swvl, VavaCars, and Truck It In either shutting down or scaling back operations.
Inflation reached unprecedented levels of around 38% before easing to approximately 3.5%, further weakening consumer spending and creating an unpredictable environment for tech companies looking to grow.
Global Ride-Hailing Companies Retreat from Unprofitable Markets
Careem’s withdrawal mirrors moves by other global ride-hailing giants such as Uber, Lyft, and Grab. These companies have been reassessing their market strategies by pulling out of regions with thin profit margins, navigating complex regulations, and focusing efforts on more sustainable or adjacent businesses like delivery services and digital payments.
Uber, while maintaining operations in parts of the Middle East and North Africa, has trimmed back where profitability remains hard to achieve.
Looking Ahead
As Pakistan’s ride-hailing industry undergoes this transformation, newer and more cost-effective alternatives are poised to reshape urban mobility. Careem’s departure closes a significant chapter but underscores the evolving dynamics and ongoing challenges faced by tech firms in emerging markets.
