The $3.1 billion acquisition of regional competitor—Dubai-based, Careem—has been approved by Egyptian regulators. This comes with agreements to a set of commitments suggested by Uber in order to curb damage to rivals.
The accusation was announced in March, following over nine months of intermittent talks between the two ride-hailing companies, providing Uber a win after a string of divestments overseas.
The deal is expected to close in January, depending on regulatory approval in various territories of which Egypt is among the most significant. Egypt, with a booming population seen swelling to 100 million, is the biggest in the Middle East for ridehailing services.
Careem will become a wholly owned subsidiary of Uber but will continue to operate as an independent brand with independent management.
"We welcome the decision by the Egyptian Competition Authority (ECA) to approve Uber's pending acquisition of Careem," a spokesman for Uber said. "Uber and Careem joining forces will deliver exceptional outcomes for riders, drivers, and cities across Egypt."
Under a series of commitments Uber has made to the ECA, the San Francisco-headquartered company has agreed to abandon exclusivity provisions with partners and intermediaries and reduce barriers to entry into the market.
An independent monitoring trustee will be nominated by Uber and approved by the ECA to ensure adherence to the commitments. Uber will share random samples of trip data with the trustee monthly to ensure compliance.
The commitments must be adhered to for five years from the date the transaction closes, or when one or more ride-hailing providers achieves 20% of weekly rides individually or 30% collectively in overlapping areas excluding Cairo and Alexandria, Egypt's biggest cities.
Excluding surge pricing and promotions, Uber will cap its yearly fare increases beyond inflationary costs at 10% for Uber X and Careem GO, the most popular services in Egypt.
Surge pricing, a mechanism that raises prices when demand far exceeds supply, will also be capped on Uber X and Careem GO at 2.5 times. Surge prices will be applied to a maximum of 30% of annual trips on the two services.
