The Rise and Fall of a Ride-Hailing Giant “CAREEM”, Now Struggling To Reclaim Its Position

How Careem Is Striving to Regain Its Foothold in Pakistan’s Ride-Hailing Market, Careem, once a dominant force in Pakistan’s ride-hailing market, is now struggling to reclaim its position amidst growing competition. In 2022, Careem celebrated a milestone with its billionth ride, with nearly 30% of these rides originating from Pakistan.

The company’s co-founder and CEO, Mudassir Sheikha, who is of Pakistani descent, had cultivated a strong association between Careem and Pakistan, to the extent that many perceived Careem as a Pakistani company despite its headquarters in Dubai.

The Shift in Market Dynamics

However, just two years later, Careem’s presence in Pakistan has significantly diminished. New competitors like inDrive and Yango have surged ahead, leaving Careem in a distant third place. According to data from, Careem currently has 373,920 daily active users in Pakistan, whereas inDrive boasts over 2 million.

Careem’s decline can be attributed to several factors, including the challenging economic environment in Pakistan. The devaluation of the Pakistani rupee and other economic instabilities have made the market less attractive for sustained investment. As Kalsoom Lakhani, a venture capitalist with deep insights into Pakistan’s tech ecosystem, notes, Careem’s strategic scaling back in Pakistan is a response to these unfavorable conditions.

Strategic Retrenchment and New Ventures

Despite these setbacks, Careem remains committed to the Pakistani market. The company has introduced innovative features like Flexi Ride and Careem For Business to attract users and retain its presence. Launched in May 2023, Careem For Business targets corporate rides, aiming to capitalize on the business travel sector. Flexi Ride, introduced in November 2022, allows users to bid for their preferred fare, similar to inDrive’s model, providing a more flexible pricing structure.

Careem has also been scaling back its non-ride-hailing operations in Pakistan. In June 2022, it suspended its food delivery service, citing the challenging economic conditions. By September 2023, Careem exited the fintech sector, withdrawing its electronic money institution license. These moves indicate a strategic refocus on the core ride-hailing business.

The Competitive Landscape for Careem

The entry of inDrive and Yango has significantly altered the competitive landscape. Both companies have aggressively expanded their presence, leveraging competitive pricing and driver incentives. Yango, for instance, launched in May 2023 and now operates in five major cities, offering performance bonuses for drivers and discounts for customers. These strategies have enabled Yango to rapidly grow its user base, reaching 728,406 daily active users by April 2024.

inDrive’s popularity stems from its bid-based fare system, which resonates well with cost-conscious users. However, this model has also attracted criticism from drivers, who feel pressured by the need to constantly negotiate fares. Despite these challenges, inDrive’s competitive pricing has significantly dented Careem’s market share.

Efforts to Re-engage Drivers and Users

Careem has been proactive in engaging with its driver community to address concerns and enhance loyalty. Initiatives like the Facebook group launched in April 2021 and live Q&A sessions with management aim to foster open communication with drivers. During the Eid festival in April 2024, Careem offered bonuses to drivers, highlighting its commitment to supporting its workforce.

Despite these efforts, many drivers express frustration with the current state of the market. Muhammad Adil, a driver from Lahore, criticizes the bid-based model as a “trap,” preferring the upfront fare system Careem used to offer. Nonetheless, some drivers still view Careem favorably due to its better pay structure, although the reduced user base remains a significant deterrent.

The Road Ahead for Careem

Careem rise and fall

Careem’s journey in Pakistan underscores the complexities of operating in a volatile economic environment and a highly competitive market. While new features like Flexi Ride have been well-received, the company faces an uphill battle to regain its former dominance. The commitment to sustainable growth and strategic initiatives reflect Careem’s resilience and adaptability.

As the ride-hailing landscape in Pakistan continues to evolve, Careem’s ability to innovate and respond to market demands will be crucial. With inDrive and Yango rapidly expanding, Careem must leverage its strengths and unique offerings to attract both users and drivers. The coming years will be pivotal in determining whether Careem can reclaim its leadership position or remain on the sidelines of Pakistan’s ride-hailing market.

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