Table of Contents
From market association to a distant third place
Careem was once closely identified with Pakistan’s ride-hailing market, even though its headquarters are in Dubai. That association was not accidental. Its co-founder and CEO, Mudassir Sheikha, is of Pakistani descent, and the company built enough cultural and commercial familiarity that many people regarded it as a Pakistani company.
Its 2022 milestone illustrates the scale of that relationship. Careem celebrated its billionth ride that year, and nearly 30% of those rides originated from Pakistan. For any platform business, that kind of usage matters beyond the headline number: it reflects a market where customers, drivers and local habits had become deeply tied to the service.
Yet the picture changed sharply in the following two years. Careem’s presence in Pakistan has significantly diminished, while newer rivals have moved ahead. inDrive and Yango have surged forward, leaving Careem in a distant third place. Data from Data.ai puts Careem at 373,920 daily active users in Pakistan, compared with more than 2 million for inDrive. Yango reached 728,406 daily active users by April 2024.
Daily active users are not a complete measure of revenue, trip volume or driver earnings, but the gap is hard to dismiss. Ride-hailing is a marketplace: riders tend to gravitate to the apps that offer attractive fares and reliable availability, while drivers go where they expect enough trips to make the day worthwhile. Once a rival gains momentum on both sides of that equation, the incumbent has to spend heavily or offer a distinctly better proposition to reverse it.
A more difficult market to fund and serve
Careem’s decline cannot be separated from Pakistan’s economic environment. The devaluation of the Pakistani rupee and other economic instabilities have made the market less attractive for sustained investment. In a business that depends on incentives, customer discounts and driver economics, currency pressure can make the familiar playbook much harder to justify.
Kalsoom Lakhani, a venture capitalist with deep insights into Pakistan’s tech ecosystem, has described Careem’s strategic scaling back in Pakistan as a response to those unfavorable conditions. That framing matters. A shrinking footprint is not necessarily evidence that the ride-hailing category has disappeared; it can also reflect a company deciding that expansion beyond its core service no longer makes financial sense in the near term.
Careem’s own decisions point in that direction. In June 2022, it suspended its food delivery service, citing challenging economic conditions. By September 2023, it had exited the fintech sector and withdrawn its electronic money institution license. These were not minor adjustments around the edges of the app. They marked a retreat from non-ride-hailing operations and a refocus on the core business.
That retrenchment may help Careem concentrate its resources, but it also changes the nature of its challenge. A broader platform can create more ways to keep people inside an app. A company focused primarily on rides must win more directly on price, availability, service and driver relations. In a crowded market, there is little room for an offering that feels merely adequate.
Flexibility has become the competitive battleground
Careem has not abandoned Pakistan. It has introduced Flexi Ride and Careem For Business in an effort to attract users and retain its presence. Flexi Ride, introduced in November 2022, lets users bid for their preferred fare, creating a more flexible pricing structure similar to inDrive’s model. Careem For Business launched in May 2023 and targets corporate rides, with the aim of capitalizing on the business travel sector.
The two products address different parts of the market. Flexi Ride is a response to the price sensitivity that has helped inDrive gain traction. Careem For Business is a bid for a customer segment where predictability and organised travel arrangements may matter as much as the cheapest possible trip. The strategy is sensible on its face, but its limits are visible too: matching a competitor’s format does not automatically erase the advantage that competitor has already built.
inDrive’s popularity stems from its bid-based fare system, which resonates with cost-conscious users. The model gives riders a sense of control at a time when prices matter intensely. But it has also drawn criticism from drivers, who feel pressured by the constant need to negotiate fares. Muhammad Adil, a driver from Lahore, calls the bid-based model a “trap” and prefers the upfront fare system Careem used to offer.
That tension exposes a difficult truth about the sector. A fare mechanism that appeals to passengers may shift pressure onto drivers. Platforms have to balance rider demand for lower prices against drivers’ need for earnings that make participation worthwhile. Careem may have an opening if drivers view its pay structure more favorably, but that advantage is weakened when the app has a reduced user base and therefore fewer potential trips.
Yango’s rapid expansion raises the stakes
Yango’s arrival has made the contest even tougher. It launched in May 2023 and now operates in five major cities. The company has used performance bonuses for drivers and discounts for customers, the kind of two-sided incentives that can quickly build activity on a ride-hailing platform. Its 728,406 daily active users by April 2024 show how quickly a newer entrant can establish a meaningful position when it combines expansion with aggressive pricing and driver incentives.
Careem is therefore facing two different competitive pressures at once. inDrive has made fare negotiation a central part of the market, while Yango has pursued rapid expansion supported by bonuses and discounts. Neither challenge is solved simply by brand recognition. The company’s long-standing link with Pakistan remains an asset, but familiarity does not guarantee that riders will open one app rather than another when they are comparing fares in real time.
Drivers remain essential to any recovery
Careem has been active in trying to maintain a relationship with its driver community. It launched a Facebook group in April 2021 and has held live Q&A sessions with management, both intended to create open communication with drivers. During the Eid festival in April 2024, Careem also offered bonuses to drivers, highlighting its commitment to supporting its workforce.
These efforts are significant because driver loyalty cannot be treated as a public-relations issue alone. Drivers experience the platform’s changes directly: fare structures, passenger demand and the practical value of incentives all shape whether they stay engaged. Some drivers still view Careem favorably because of its better pay structure. At the same time, the reduced user base remains a major deterrent. Better pay on individual trips is less persuasive if there are not enough trips to sustain regular earnings.
Careem’s road ahead is therefore less about reclaiming a past reputation than proving that it can offer a viable present-day proposition. Its Flexi Ride feature has been well-received, and its strategic focus on ride-hailing gives the company a clearer mandate. But the company is operating in a volatile economic environment against competitors that have already established strong positions through pricing, incentives and expansion.
The coming years will determine whether Careem can convert its resilience and adaptability into renewed leadership, or whether it remains on the sidelines of Pakistan’s ride-hailing market. To reclaim its position, it will need to attract users without alienating drivers, respond to market demands without overextending itself, and make its core ride-hailing service compelling in a market that no longer waits for any one company.
More Updates: Tech News
