May 4th was unpleasant for Uber and Careem, for multiple radical decisions were announced, as the pandemic is forcing changes and compromises for the ride hailing giants.
Careem is Laying off employees:
Uber subsidiary Careem is laying off 536 employees which makes up 31% of its workforce, as the coronavirus pandemic takes its toll on the global ride-share industry.
Careem, which primarily operates in the Middle East, was acquired by Uber last year for $3B.
Employees who are laid off will receive at least three months’ severance pay, one month of equity vesting and, where relevant, extended visa and medical insurance through the end of the year, according to the company’s blog post announcing the reductions.
“We delayed this decision as long as possible so that we could exhaust all other means to secure Careem,” Mudassir Sheikha, the company’s co-founder and CEO, wrote in a blog post Monday.
The company made the cuts to preserve the business and its vision to create a consumer-facing “super app” that offers a suite of lifestyle services, including a digital payment platform and last-mile delivery. Those reductions will also affect some previously announced products, including Careem Bus.
Careem is suspending its mass transportation business:
According to Menabytes, Careem Bus, company’s CEO Mudassir Sheikha announced today they are killing Careem‘s mass transportation business. The decision was announced by him as part of the note to employees explaining the latest layoffs at the company. in a note to its employees today.
“We assessed our strategic bets on potential traction in the short to mid-term and our financial ability to pursue them all simultaneously. The outcome was a decision to suspend Careem Bus,” explained the note by Careem’s CEO.
The decision comes less than eighteen months after Careem’s expansion into mass transit. The company had first launched Careem Bus in December 2018 in Egypt and had since expanded it to Saudi, Pakistan , and Jordan.
“The economics of the mass transportation business have improved but remain challenging, and at this time, we need to accelerate our investments in deliveries and the Super App,” We believe Careem BUS is a much-needed offering in some of our core markets, and I predict that the service will reappear on the Careem Super App in the future.”
Uber Eats exits eight global markets:
Uber Eats will discontinue operations in the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay, and Ukraine by June 4, but rides’ operations won’t be impacted in those regions.The company will transfer its Eats operations in the United Arab Emirates to Careem.
“Consumers and restaurants using the Uber Eats app in the UAE will be transitioned to the Careem platform in the coming weeks, after which the Uber Eats app will no longer be available,” according to a regulatory filing detailing the operational shifts.