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February 21, 2020

CCP approves Uber-Careem merger in phases

National

February 21, 2020

ISLAMABAD: The Competition Commission of Pakistan has approved the Uber-Careem merger through a Phase-II order, imposing pro-competitive and tough conditions ensuring a level playing field for new entrants/ competitors in the app-based ridesharing market.

The conditions will remain applicable on Uber for up to three years after the merger or until the occurrence of Meaningful Market Entry of competitors.

The meaningful market entry will occur when one or more Ridesharing Services Provider(s) enter Pakistan and achieve individually at least 25pc (market share), or collectively at least 33.3pc (market share) of weekly ridesharing trips on average for three consecutive months.

This condition will allow competitors to grow and flourish in the app-based ridesharing market and for the merged entity not to abuse its dominant position.

The CCP opened a Phase-II review of the merger as it was resulting in a significant lessening of competition in the market for app-based ridesharing services.

In its Phase II-order, the CCP has imposed certain conditions on Uber to address the competition concerns regarding an increase in prices of products or services, discriminatory pricing, degradation in quality of services, and possible lack of innovation.

The CCP has imposed a "No Contractual Exclusivity" condition to ensure that drivers or captains are free to offer their services on any ridesharing platform they choose, as well as being street hailed.

Uber welcomes decision

“We welcome the decision by the Competition Commission of Pakistan (CCP) to approve Uber's pending acquisition of Careem," said Uber spokesperson.

"Uber and Careem joining forces will deliver exceptional outcomes for riders, drivers, and cities across the country, and in this fast-moving part of the world."