In March 2019, Uber agreed to buy Careem, its biggest rival in the Middle East, for about US$3.1 billion. Was it a smart move? This competition-level case asks you to judge the deal like an investor would. It takes about 60 minutes and suits students aged 16 to 18.
Case at a glance
Level: Competition level, ages 16 to 18
Time: about 60 minutes
Skills: strategy, deal structure, risk analysis, quick estimates, persuasive recommendations
Good practice for: the Harvard Crimson Global Case Competition, the Wharton Global High School Investment Competition and the International Economics Olympiad
Companies: Uber (United States) and Careem (Dubai, United Arab Emirates)
The situation
Careem was founded in Dubai in 2012. By early 2019 it offered ride-hailing, meal delivery and payments to millions of users in 115 cities across the Middle East, North Africa and Pakistan. Its ride-hailing business ran in 14 countries which, by Uber’s estimate, had more than 530 million people in 2018.
Uber had a clear goal: a leading position in ride-hailing in every major region of the world. But it had not always won. In 2018 it sold its Southeast Asia business to its local rival Grab, and combined its Russia business with Yandex.Taxi, keeping only minority stakes in both.
In the Middle East, Uber chose a different path. It saw the region as attractive because of its large population, growth potential, tech-savvy people, high smartphone use and low car ownership.
The deal on the table (March 2019)
Price: about US$3.1 billion
Payment: about US$1.4 billion in cash, plus up to about US$1.7 billion in convertible notes that could turn into Uber shares at US$55 per share
Brand: Careem would keep its own brand, app and market-facing operations
Leadership: Careem’s co-founder and chief executive, Mudassir Sheikha, would keep running it, with a board of three Uber and two Careem representatives
Conditions: the deal needed approval from regulators in some countries, and was expected to close in January 2020
Words to know
Acquisition: one company buying another.
Convertible note: a loan that can later be swapped for shares in the company that issued it, instead of being repaid in cash.
Regulator: a government body that can block a deal if it thinks customers would lose out from less competition.
Your questions
In Southeast Asia and Russia, Uber stepped back. In the Middle East, it paid to buy its rival. What might explain the different choices?
Why would Uber keep the Careem brand and app running separately rather than merging everything into Uber?
Why pay more than half of the price in convertible notes rather than all in cash? What does each side gain, and what does each side risk?
Name three things that could go wrong with this deal, and one way to reduce each risk.
Quick estimate: the deal values Careem at about US$3.1 billion, and its ride-hailing countries had more than 530 million people. Roughly how much is Uber paying per person in those markets? Is that cheap or expensive, and what else would you need to know before deciding?
You are advising Uber’s board. In two minutes, recommend whether to go ahead, and on what conditions.
Thinking toolbox
Buy, build or partner: compare buying the rival with competing harder or stepping back.
Who pays and how: cash is certain today; shares and notes tie both sides to the future.
Customers and regulators: what happens to prices and choice when two rivals become one?
Integration: people, culture and technology often decide whether a deal works.
Take the challenge
Record a pitch of up to 2 minutes giving your recommendation to Uber’s board (question 6), and ask a parent to enter it in the IFA Case Challenge. Every entry receives short written feedback.
What happened next
Uber completed the acquisition on 2 January 2020 for US$3.1 billion. Careem became a wholly owned part of Uber but kept its own brand, and Mudassir Sheikha continued to lead it. By then Careem operated in 120 cities across 15 countries. At that point, completion in Pakistan, Qatar and Morocco was still waiting for regulatory approval.
Look at your answer to question 4. Which of your risks showed up in the real deal?
Answer to question 5: US$3.1 billion ÷ 530 million people ≈ US$5.85 per person. On its own this number says little; you would also want to know how many people actually use ride-hailing, how much each trip earns and how fast the market is growing.
Sources
Written by International Finance Academy for learning, using public sources checked on 8 November 2026. IFA is independent and is not affiliated with, or endorsed by, Uber, Careem or any company named.
