Uber isn't leaving the MENA region just yet, in case you were wondering; a part of it is, though.
The ride-hailing company announced on Monday that it will be retracting its Uber Eats services from seven markets indefinitely while choosing to hand over the services' business operations to Careem only in the UAE. Careem, founded in Dubai in 2012 and as of 2019 fully owned by Uber, already has food delivery operations running in the UAE under the name Careem NOW.
"Consumers and restaurants using the Uber Eats app in the UAE will be transitioned to the Careem platform in the coming weeks, after which the Uber Eats app will no longer be available," a statement by Uber reads.
Uber Eats is retreating on June 4 from Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay, and Ukraine; Uber rides will not be affected in the aforementioned countries.
The reason behind this decision is, unlike popular belief, not related to the current COVID-19 pandemic, which has brought small to large enterprises to their knees.
"These decisions were made as part of Uber's ongoing strategy to be in first or second position in all Eats markets by leaning into investment in some countries while exiting others," reads a statement by the company.
As an example mentioned by TechCrunch, Eats halted its operations in India earlier this year since Zomato and Swiggy take up the first and second spots in the country. Uber then sold its Eats business in India to Zomato and bought 9.99 percent shares in the latter.
This isn't all that's happening in the universe of Uber. Since it declared the Eats news, the company saw its stock price go down 3 percent.
As for Careem, Uber's subsidiary in the Middle East and which cost the U.S. giant $3.1 billion to fully acquire, will reportedly lay off 31 percent of its employees (or cut 536 jobs).
Those leaving the Dubai-based ride-hailing and delivery company will receive "at least three months of severance pay, one month of equity vesting, and where relevant, extended visa and medical insurance" for them and their family until the end of the year. In addition, other resources like counseling will be offered to help laid off workers get through these tough times.
Careem's BUS mass-transportation services have also been halted.
According to Reuters, Careem's Chief Executive Mudassir Sheikha said that COVID-19 has "put our dream and future impact at significant risk," with business plummeting 80 percent with no clear indication of when it will be back to normal. It was not disclosed which departments will be affected by the layoffs, however, "tech-colleagues are protected in relative terms so it could continue to invest in its products."
