Careem vs Uber: two titans duke it out on the streets of Karachi

Illustration by Tech in Asia’s Andre Gunawan.

Much has been written about how ridesharing works in the US and elsewhere. We’re here to share how two ridesharing companies are giving each other stiff competition in Karachi, Pakistan.

Over the last few years, Uber has reigned supreme as the top-tier ridesharing and car-calling service around the world. It has captured over 87 percent of the US market share. It has begun tremendous expansion in many countries around the world, especially in MENA countries, including Saudi Arabia (which raised US$ 3.5 billion in funding!), the UAE, Egypt, and Pakistan.

In Pakistan, Uber is facing stiff competition from a competitor. Careem, headquartered in Dubai, entered the Pakistani market slightly before Uber, and though Uber continues to swell its market share, Careem isn’t giving it up without a fight.

So how does Uber stack up to Careem, and what are the issues facing Uber as it tries to expand against its MENA-based competitor? We’ll take a look at some of the challenges Uber is struggling with, and some of the flaws of Careem, their biggest competitor, and look at how they each can find a path forward.

Uber needs better payment integration systems

Uber drivers in America and other regions absolutely refuse to take cash. The company has amended this policy somewhat in MENA countries. But Careem has a simple and robust payment system that combines both account credits and cash payments. It can combine ride credit and cards with a cash payment if your balance is short, making it much more convenient in some situations than its USA-based competitor.

It’s clear that Uber has to further adjust to the market requirements of Pakistan and other MENA countries, and that it hasn’t quite done so yet, leading many to prefer the simpler, familiar payment systems of Careem.

Uber has longer pickup times in some areas – and Careem does in others

One problem facing Uber is particularly difficult: longer pickup times. This is caused by simply having fewer Uber drivers than their competitors, so typically Careem will always have a faster pickup time by virtue of having more drivers who are closer to their customers. This is a particularly hard problem to solve. And if you ask Careem users, it’s one of their primary reasons for continuing to use Careem over Uber.

This problem, however, is mainly location-specific – in other regions of Pakistan, like North Karachi, Surjani, and Gulshan, customers report that Careem suffers from lack of availability.

In general, both companies focus the bulk of their service on city centers more than outlying regions, so you might have difficulty getting a ride with either service if you’re not in a densely populated area.

Lack of trust in ride-sharing services

Since Uber began operations in Pakistan, there have been some accusations of fraud, with fleets of rental car owners importing cheap labor and sending out all units to pick up passengers.

Now, there’s not necessarily anything illegal about that, but in some cases, it has led to poor customer experiences and overworked drivers, some of whom report working for up to 18 hours a day. Tired drivers mean increased risks for riders.

While Uber has responded to these allegations by taking more safety precautions when choosing drivers, apart from stepping up their customer service options in Pakistan, it’s still left a bad impression on some users of the ride-sharing service, who prefer Careem and other competitors.

However, Careem has had issues of its own, including allegations that a driver troubled a female passenger.

Uber has higher surge prices – but lower overall cost

Conclusion