Careem Exits Pakistan Ride-Hailing Market, Focuses on Food & Delivery

Careem to suspend services effective July 18

Start-up pressures, policy uncertainty and investor concerns fuel exit; core operations

 to remain through tech arm

 KARACHI:

Careem, the first ride-hailing app to pave the way for many others in Pakistan, has announced it will suspend its ride-hailing services on July 18, 2025. CEO and Co-Founder Mudassir Sheikha shared the news on LinkedIn, citing "the challenging macroeconomic reality, intensifying competition, and global capital allocation" as key reasons making it difficult to justify further investment to maintain a safe and dependable service.

Careem's decision marks another setback in Pakistan's struggling start-up landscape, which has seen several high-profile closures since 2022, including Airlift, Swvl, Jugnu, and Retailo. Sheikha stressed that Careem's role in Pakistan extended far beyond transport. "It delivered significant public goods — digital infrastructure, trust, regulation, capability, and confidence — that paved the way for countless local and global ventures to take root in Pakistan," he said.

Though ride-hailing services will cease, Careem's presence in Pakistan will continue through Careem Technologies, which is building the "Everything App" from Pakistan for the wider region. Sheikha noted, "Nearly 400 colleagues across all functions (including engineering) are building the app and its ecosystem — food/grocery delivery, payments, and more." He added the company is hiring for over 100 open roles and expanding its Falcon/NextGen programme.

Commenting on future prospects, Sheikha said, "Our commitment to Pakistan remains strong, and I sincerely hope to bring Careem's services back in the future." App users have been informed, with Careem Care promising instructions on how to reclaim existing wallet balances. Dr Noman Said, CEO of SI Global Solutions, called the exit a "wake-up call for Pakistan's digital economy." He added, "Careem's suspension is more than a transport inconvenience — it's a red flag for foreign investors. Urban commuters are losing a trusted service, and female riders are particularly affected. The move highlights deeper systemic issues in Pakistan's tech ecosystem."

ISLAMABAD

A Careem Inc. office stands in Islamabad, Pakistan

June 18 (Reuters) - 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 move underscores strain on Pakistan’s digital economy, as tech firms scale back amid high inflation, weak consumer demand, and tighter global capital flows. It ends a nearly decade-long run for Careem, which launched in 2015 and became a dominant player in app-based mobility.

"This was an incredibly difficult decision," Mudassir Sheikha, co-founder and CEO of Careem, said in a LinkedIn post on Wednesday. "The challenging macroeconomic reality, intensifying competition, and global capital allocation made it hard to justify the investment levels required to deliver a safe and dependable service in the country."

Careem helped normalize digital payments, app-based bookings, and female ridership in Pakistan.

Newer entrants such as Russia-backed Yango and Latin America’s inDrive have expanded in major cities, offering low-cost models.

The decision follows Uber’s exit from Pakistan in 2022.

Pakistan’s startup ecosystem has come under pressure since 2022 as venture funding dried up, inflation surged to a record 38% before falling to 3.5%, and consumption weakened. Startups including Airlift, Swvl, VavaCars and Truck It In have shut down or scaled back.

Globally, firms like Uber, Lyft and Grab have exited unprofitable markets, narrowed focus, or expanded into adjacent services such as deliveries and payments. Rising costs, regulation, and thin margins in emerging markets have added to the strain.

Uber still operates in parts of the Middle East and North Africa but has pulled back from Pakistan in 2024 after announcing an initial exit in 2022.