Why has Uber shut services in 5 Pakistani cities including Islamabad & Karachi?

Cab service aggregator Uber has now decided to discontinue its ride-hailing services in five cities of Pakistan including capital Islamabad and Karachi. The company said the operations will continue in Lahore where it will plan new products. The move is being seen as an attempt to reduce the overlap between Uber and Middle East aggregator Careem, which the former bought in 2019 for $3.1 billion to consolidate its foothold in Pakistan and Gulf, Reuters reported. The cab aggregator has also decided to shun operations in Multan, Faisalabad and Peshawar. The app said that the drivers and customers can switch to Careem for availing the services. Uber said in a statement it would prioritize minimizing the impact to its employees, drivers, riders, and partners who use the app during this change in those cities.Uber’s step comes at a time when Pakistan is facing a massive economic crisis made worse by the devastating floods this summer, killing more than 1,700 people and causing an estimated $30 billion in damage. The country is battling mounting inflation, high foreign debt and declining foreign reserves. Due to floods, the textile factories involved in the business of producing towels and bedsheets for export to US and Europe have shut down, Geo News reported. Pakistan’s foreign reserves currently stand at a level that cover just over a month of imports – which makes intervention difficult, Reuters reported.In addition, under the ongoing IMF programme, Pakistan has agreed to a market-based currency exchange regime and earlier this year passed a law that gave the central bank more autonomy and insulated it from government pressure.(With Reuters inputs)

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