Item — HN Reader

As an end user of Careem, I'm waiting for the impending doom of price increase and bad service.

Uber and Careem are the only two service providers in my country (Pakistan); before Uber entered, the prices were quite high because Careem had no competition and they cashed in their monopoly. Uber entered the market and caused a price war driving prices per km down significantly and causing both providers to add new features to cater for the local market as well. However, Uber is usually thought to have a low quality of service here; drivers on their network quite literally abuse the platform; they will refuse to drive to the destination if they don't want to go there; they will use tactics to get the ride transferred from them if it's not profitable enough for them. The end result is that the customer receives a slightly cheaper but vastly inferior service from Uber. Compared to this, Careem's quality assurance and customer care is a winner.

With Uber buying Careem and eliminating competition, I can't imagine how much pain it is going to be to call a ride now, if they absorb Careem's customer-base completely and close its app. I thought there were anti-competition laws that prevented this from happening; I guess they don't apply if both the companies are foreign and the deal is happening overseas.

The rules still apply if both companies are foreign and the deal is happening overseas. The competition regulator in all the territories the companies operate need to give their approval. Take the Disney Fox deal as an example. The Brazilian regulator required that Disney divest it’s sports offerings in Brazil alone because otherwise the combined company would hold all the football rights.

If you’re wondering why the competition regulator in your country didn’t stop this particular deal there are a few possibilities.

1. They’re funded so poorly they don’t have the resources to investigate the impact.

2. They did investigate but Uber gave enforceable assurances that consumers wouldn’t be impacted.

3. Uber bribed the regulator. Not saying Uber engages in such behaviour on the reg, but it’s possible.

Why isn't Lyft going for foreign markets as aggressively as Uber?

I think that would be because Uber has some USD 24 billion invested in it while Lyft has raised nearly USD 5 billion (figures from Crunchbase). With deep pockets, Uber's right move is to spend fast and monopolize as much of the market as possible. They do this by buying out competitors or offering massive discounts on their pricing to out run their competitors. They can afford to figure out how to be profitable later.