The company said it made the decision as it was “prioritizing the security of the company.” Uber said it still believed Careem had the potential to be a major force in the region.
Careem chief executive Mudassir Sheikha said in a blog post that “the crisis brought on by COVID-19 has put our dream and future impact at significant risk.”
The blog post was entitled “Securing Careem through these uncertain times,” and Sheikha wrote in it that the company’s business had seen an 80 percent decrease in activity. And with no clear timeline on when it would become safe to operate as normal again, the company had to cut staff – an action Sheikha said was delayed as long as possible.
And while Sheikha wrote that the company had been looking critically at all the ways it could save money in the past months, it wasn’t enough in the end.
For the employees being laid off, Careem will be granting three months’ severance pay, one month of equity vesting and extended visa and medical services for them and their families for the rest of the year. They’ll also get to keep computers and smartphones granted through Careem until they can find other alternatives.
In addition, the Careem BUS operation, which offered mass transportation services, was also suspended for now, Sheikha wrote.
Careem’s decision comes on the heels of Uber’s pulling its Eats service in several markets: the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Ukraine and Uruguay.
Uber said that decision was made because the program had not taken off as expected in those locations.
Uber said its Eats program will be done in those locations by June 4, and will ultimately affect 50 full-time jobs.
And despite the pandemic forcing restaurants to stop offering dine-in services, online food ordering also hasn’t seen a major increase in business. In some cases, the usage has declined as much as 23 percent.