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Wednesday, 23 September 2020

Uber Eats suspends operations in Middle East as part of competition shakeup

Uber Eats said it took the decision based on 'a hard look at the business metrics' over a competitive market for food delivery

Menna Alaa El-Din , Monday 4 May 2020
Uber Eat
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Uber Eats said it is discontinuing its services in the Middle East, including in Egypt, starting 18 May as it looks into redirecting resources to other markets where its food delivery business is booming.

According to a filing with the US Securities and Exchange Commission on Monday, Uber said it would “fully discontinue” Uber Eats operations in the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay and Ukraine by 4 June 2020.

Regular Uber rides will continue unaffected, it said.

Uber said it will transfer its Uber Eats business operations in the United Arab Emirates to Careem, its wholly-owned subsidiary operating primarily in the Middle East.

Consumers using the application in the UAE will be transitioned to the Careem platform in the coming weeks, after which the Uber Eats app will no longer be accessible.  

“We have made the decision to discontinue Uber Eats in the Middle East. This will also allow us to commit further energy and resources on our top Eats markets around the world,” an Uber Eats spokesperson told Ahram Online.

Uber Eats said it took the decision based on “a hard look at the business metrics” amid a competitive market for food delivery.

The suspension of the food delivery services would allow Uber Eats to steer resources to markets in Europe and globally, where the service is growing fast.

The spokesperson said Uber would “remain committed to growing and investing in Uber’s mobility platform in the Middle East.”

“We are committed to continuing to serve cities in the Middle East through our Uber Rides business, where we continue to launch new products/services such as Uber Medics to help support our communities through this difficult time,” the statement read.

Monday’s announcement ends Uber Eat’s two-year operations in Egypt, as the food delivery business in the populous country continues to see an exit from leading companies operating in the sector, which is dominated by the Egyptian food ordering website Otlob.

Earlier this year, Spanish on-demand delivery startup Glovo exited the Egyptian market and three others globally as part of a plan it said aims to push for profitability in 2021.

January’s announcement of an Egypt exit was the second by Glovo, months after it announced it halted its operations in Egypt in April 2019 without providing further details.

However, Glovo resumed its services temporarily in June 2019 after the Egyptian Competition Authority (ECA) gave a green light to the resumption of the service after it obliged the company to suspend an agreement with German Delivery Hero, another delivery service in the country, that violates anti-monopoly laws. 

 

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