Chinese ride-sharing firm Didi Chuxing has invested in the Middle Eastern ride-hailing firm Careem as part of a partnership agreement between the two firms, in what is being seen as another broadside at Uber.
Didi is investing in Careem to strengthen the Dubai-based company’s position in the market and improve its services, the companies said in a statement. However, the deal value was not disclosed.
The two firms will also collaborate by sharing information on transportation technology, product development, and operations, the statement said.
Careem said that DiDi will help it drive greater affordability for reliable mobility services.
“Didi Chuxing brings leading edge AI capabilities, insight, and expertise to our organization as we enter our next phase of growth,” Careem CEO Mudassir Sheikha said.
“Growing urban populations and economic and social diversity in the MENA region present enormous opportunities for the ride-hailing economy,” said Cheng Wei, founder and CEO of Didi Chuxing.
Careem, a Middle East rival to Uber Technologies, was founded out of Dubai in 2012.
Launched in 2012 by Sheikha and fellow McKinsey & Co alumni Magnus Olsson, Careem has a fleet of more than 250,000 drivers as of date. It also claims to have more than six million users registered through its mobile app.
Its largest markets are Cairo, Karachi, and Riyadh. Careem’s operations have grown to 80 cities since it started operations five years ago. It competes across the MENA region with Uber and other apps.
Uber under more pressure
This is not the first time two Uber rivals have teamed up. Or Didi has entered into an investment or agreement with other Uber rivals.
San Francisco-headquartered Uber is the largest mobile app-based transportation firm in the world in terms of both valuation and network. The company is valued at over $50 billion. It operates in operating in 633 cities in more than 64 countries.
But it has been under assault on multiple fronts. Apart from regulatory hurdles and losing battles in countries Russia and China, in June 2017, Uber co-founder Travis Kalanick had to step down as CEO of the cab-hailing firm in the face of mounting pressure from investors.
Didi serves more than 400 million users in 400 cities with over 20 million rides per day.
And it landed the first nail in Uber’s decline after it acquired Uber China in August 2016.
It has also been investing in Uber’s rivals around the world.
In December 2015, in a move that was expected to hit Uber’s business in Asia and the US, Didi partnered with three of those regional Uber rivals.
As per the partnership, the four companies allowed users to book cabs from each other’s apps in all the regions where they operate.