Competition authority approves Uber-Careem merger

The Saudi General Authority for Competition (GAC) approved on Tuesday Uber Technologies Inc.’s acquisition of ride-hailing app Careem, the authority said in a statement, adding that certain conditions will be imposed on the new entity.

Going forward, Uber and Careem will maintain two separate brands in the market.

In a study conducted by GAC, the authority concluded that the merger of Uber and Careem is expected to have a massive impact on market competition, mainly price hikes, low service quality and emergence of new challenges to existing and new competitors.

Accordingly, several conditions and obligations were imposed on the new entity to protect consumers in the Kingdom against any potential increase in prices or changes to the quality of services.

In addition, the market will remain open to new entrants or to those pursuing expansions, GAC added.

These conditions include the following:

1) Setting a higher price ceiling for organic fares, excluding surge fares and promotions.

2) Setting a higher price ceiling for surge fares.

3) Maintaining service quality and innovations, which will positively reflect on riders and drivers.

4) Allowing drivers to work for Uber or any peer company.

5) Allowing other ride-sharing providers to access Careem maps at market price.

6) Allowing riders to view their personal data, and transfer it to other competitors, including new market entrants.

7) No price discrimination is applicable to users.

8) GAC is authorized to review the new entity’s data and monitor its compliance.

In March 2019, Uber reached an agreement to acquire its Middle East competitor Careem for $3.1 billion. Six months later, both firms submitted their request to the Saudi Authority seeking approval for the merger.