Careem to Suspend Ride-Hailing Services in Pakistan

Careem will cease its ride-hailing operations in Pakistan starting July 18, as announced by CEO and co-founder Mudassir Sheikha on LinkedIn. Sheikha cited a “challenging macroeconomic climate, increased market rivalry, and global capital allocation” as factors making it difficult to sustain the necessary investment for a reliable service.

However, Careem is not exiting Pakistan entirely. Sheikha clarified that Careem’s involvement in Pakistan will continue in a modified capacity.

Careem Technologies, the entity developing the ‘Everything App’ designed for daily use, will maintain its operations in Pakistan, contributing to the broader region, he stated.

Nearly 400 professionals across various departments, including engineering, are engaged in developing the ‘Everything App’ and its integrated verticals, such as food and grocery delivery, and payment solutions.

“This presence is expected to expand, with over 100 positions currently open and the growth of our Falcon / NextGen program, which recruits top graduates from Pakistani universities, providing them practical training in building scalable systems,” he added.

Sheikha acknowledged the difficulty of this decision, describing it as “the conclusion of an iconic chapter, one constructed with purpose and perseverance.”

Users of the app have reportedly received notifications indicating that Careem Care will remain accessible until September 18, 2025, to address any issues.

For users with remaining funds in their Careem Wallet, the company will provide instructions on how to claim their balance.

Careem’s journey began in July 2012, initially as a website-based service for corporate car bookings in Dubai. It later evolved into a ride-hailing platform across the Middle East, North Africa, and South Asia.

Careem launched in Pakistan in 2015, quickly establishing itself as a leading ride-hailing service. Uber acquired Careem in a significant deal in 2020.

While Sheikha did not provide specific details, it’s understood that currency devaluation, high inflation rates, and fluctuating interest rates have increased operational expenses for businesses in Pakistan.

Furthermore, shortages of dollars and restrictions on imports have complicated the process for companies to repatriate earnings or invest in technological infrastructure.

Ride-hailing services operating within the country have encountered inconsistent regulations, licensing complications, shifting policies across different provinces, ambiguous taxation laws, and a general lack of regulatory support for gig-economy models, creating uncertainty.

Additionally, the government’s recent budget announcement introduced a digital transaction levy of 5% on payments to domestic and international digital vendors, along with an 18% e-commerce tax.