Egypt warns Uber of acquiring Careem
The Egyptian Competition Authority (ECA) is warning against a possible merger between ride-sharing services companies Uber and Careem, saying that it could cause serious and irreversible damage to competition and consumers.
The state-run body said in a statement on Wednesday that it is imposing measures to regulate competition between the two and only ride-hailing applications and safeguard the competitive structure of the market.
Fines of up to 500 million pounds for each company may be levied in case of violating these instructions, it added.
The measures require Uber and Careem to notify the ECA if they intend to agree to merge, and not to consummate the merger unless and until the ECA determines they may do so.
“Uber and Careem are the only ride-hailing applications available in Egypt. Any anticompetitive interaction or harmonization of their business strategies including agreement to merge has the potential to cause serious and irrecoverable damage to Egyptian competition and consumers,” said Amir Nabil, the chairman of the ECA.
The measures require the companies to notify the ECA if they intend to agree on merger or any other agreement engendering the same effects; following notification, give the ECA 60 working days to investigate the competitive impact of the agreement in more detail.
The companies will be obligated not to consummate the merger unless the ECA finds that it is exempt from application of the competition laws.
Riders and drivers both benefit substantially from current competition between Uber and Careem, and that these benefits will be lost if the two parties ceased to compete, especially as barriers to entry and expansion are high, the statement noted.
The damage that will ensue will inflict serious harm to competition and will negatively affect the working class relying on the income generating from subscribing their cars to both companies.