Careem, Uber's ride-hailing arm in the Middle East, will suspend its Pakistan service on July 18, citing economic challenges, rising competition, and capital constraints, ending its core business in a country where it helped pioneer app-based transport nearly a decade ago.

The decision highlights the pressure on Pakistan's digital economy, as technology companies reduce operations due to high inflation, low consumer demand, and restricted global investment. It brings to a close nearly ten years for Careem, which was launched in 2015 and became a leading force in app-based transportation.

Mudassir Sheikha, cofounder and CEO of Careem, shared on LinkedIn, “This was an extremely tough choice. The difficult macroeconomic conditions, increasing competition, and global financial allocation made it challenging to support the investment needed to provide a safe and reliable service in the country.”

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Careem played a key role in promoting digital payments, app-based bookings, and female riders in Pakistan.

New competitors like Russia-backed Yango and Latin America's inDrive have entered major urban markets, providing low-cost services.

This move comes after Uber's withdrawal from Pakistan in 2022.

Since 2022, Pakistan's startup environment has faced challenges as venture capital became scarce, inflation peaked at a record 38% before decreasing to 3.5%, and consumer spending weakened. Companies such as Airlift, Swvl, VavaCars, and Truck It In have either closed down or scaled back their operations.

Globally, companies like Uber, Lyft, and Grab have exited unprofitable markets, refined their focus, or diversified into related services like delivery and payments. Increasing costs, regulatory challenges, and low profit margins in emerging markets have contributed to the pressure.

 

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Uber continues to operate in certain areas of the Middle East and North Africa but has scaled back where profitability remains difficult to achieve.