Uber's Mideast business Careem sees recovery slowing as infections rise
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FILE PHOTO: Careem CEO, Mudassir Sheikha shows the logo of the company's delivery service Careen NOW on his mobile at the company headquarters in Dubai, UAE December 13, 2018. REUTERS/Satish Kumar
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By Alexander Cornwell
DUBAI (Reuters) - Uber's Middle East business Careem is seeing a slowdown in the recovery of its ride-hailing business due to a new wave of COVID-19 infections, and tentatively forecast business would return to pre-pandemic levels by the end of the year.
The comments represented a more pessimistic outlook from Careem, which said last September it expected its ride service to recover before the end of 2021.
Careem Chief Executive Mudassir Sheikha, giving the year-end forecast for a full recovery, cautioned that circumstances could change.
"That is something that we still think will happen but as you can imagine, it is a pretty volatile situation so we're just monitoring it closely," he told Reuters.
Saudi Arabia, the United Arab Emirates, Kuwait have recently imposed new restrictions as the number of cases there have risen. Egypt and Lebanon have also seen infections increase.
Sheikha said that while demand had slowed of late, the ride-hailing business was nine times larger than at its lowest point last year - although still below pre-pandemic levels.
Careem, bought by Uber Technologies Inc in 2019 for $3.1 billion, says it offers ride-hailing services in 100 cities, mostly in the Middle East, while its smaller delivery business is in seven cities, mainly delivering food from restaurants.
Sheikha said demand for the delivery service continued to grow and that the business was now four times larger than before the pandemic.
This week Dubai-based Careem, which says it has 48 million active users, said it would charge restaurants a monthly fee for delivery services, instead of commission on each order which is the standard practice in the industry.
Sheikha said the company expected this to drive more restaurants, and users, to its app.
"What we might lose in margins in the short to mid-term, we will definitely make it up in volumes over time."
(Reporting by Alexander Cornwell; Editing by Pravin Char)
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