Home South Asia Pakistan Sindh Minister threatens to shut Careem and Uber down in Karachi

Sindh Minister threatens to shut Careem and Uber down in Karachi

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Minister for Transport and Mass Transit Syed Awais Qadir Shah has given one week’s deadline to the two main app-based ride-hailing services operating in Karachi to acquire formal route permits from the provincial authorities else their operations could be shut down altogether.

The Minister issued the deadline on Monday, 22nd October as he chaired his first meeting with officials of the Sindh Transport Department after assuming the office of the provincial ministry last week.

The motorcycle-based ride-hailing services lately launched in the city could meet the same fate as their operators didn’t take any proper permission from the government.

Mr. Shah pointed out that a memorandum of understanding (MoU) had been signed almost three years ago between the Sindh government and these ride-hailing services (Uber and Careem)and since then there had been no further progress to legalize or formalize their operations in Karachi.

In a statement, a spokesperson for ride-hailing service Uber said: “The Sindh government has been supportive of disruptive technologies in recent years and we appreciate the role they have played in providing masses a more convenient and affordable mode of transport along with creating numerous economic opportunities. We are looking forward to working with the Sindh government to address their concerns.”

Read more: Will Uber & Careem merger create a monopoly in Pakistan?

He directed the officials concerned of the transport department to immediately write to the management of Uber and Careem giving them the ultimatum of one week to get properly registered with the department in order to avoid the complete shutdown of their services

Similarly, the motorcycle-based ride-hailing services lately launched in the city could meet the same fate as their operators didn’t take any proper permission from the government.

The Minister said that the permission of the provincial government was necessary as the government was held responsible in case any untoward incident or accident takes place involving these ride-hailing services operating both four-wheelers and two-wheeler vehicles.

Careem had recently been under acquisition talks with Uber. Sources within Careem told GVS that Careem’s CFO had visited San Francisco to negotiate with Uber last month.

Various incidents of theft, robbery, harassment, and murder have been reported and associated with these ride-hailing services over the duration of their operations in Pakistan, with most of these incidents having been reported from Karachi.

The Minister asked the officials concerned to take due action against school buses, vans, and large buses operating on inter-city routes relying on Compressed Natural Gas (CNG) as their fuel option as since 2015 there has been a ban on such passenger carriers to use CNG cylinders.

He added that the government had lately not allowed any hike in the fares of intra-city public transport running in Karachi, and ordered the department officials to initiate a crackdown against the operators of public transport fleecing passengers after doing an undue hike in the fares of coaches, buses, and mini-buses operating in the city.

Read more: Are Uber and Careem empowering women in Pakistan?

Careem had recently been under acquisition talks with Uber. Sources within Careem told GVS that Careem’s CFO had visited San Francisco to negotiate with Uber last month. Various online publications in Pakistan and the Middle East are quoting Bloomberg to hint that App driven Taxi Company (Ride-hailing) Uber Technologies Inc [UBER.UL] is in talks to buy Dubai-based rival Careem Networks FZ for about $2 billion to $2.5 billion, GVS earlier had reported.

Such a decision, though regional in its dimensions, will also have implications for taxi services in Pakistan where the competition between Uber and Careem had provided economical fares for young professionals and a safe traveling atmosphere for female commuters.

Read more: Uber, Lyft end mandatory arbitration for sex misconduct claims

Bloomberg had reported, in early September, that both companies had preliminary talks in July this year and no final decisions had been made, and the companies may still decide against the transaction. However, this development should worry the Competition Commission of Pakistan (CCP) because a possible buy-over by Uber or merger with Careem will lead to a situation of monopoly in Pakistan and the fares can then gradually rise in the absence of competition.


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