Turkish taxi drivers to break ties with Careem after acquisition by Uber

Turkish taxi drivers to break ties with Careem after acquisition by Uber
Turkish taxi drivers are to cease working with ride-sharing app Careem after the company was acquired by the yellow cab drivers' arch rival Uber.
4 min read
27 March, 2019
Istanbul taxi drivers have been in a feud with Uber for a year [Anadolu]
Turkish taxi drivers are to cut ties with ride-sharing app Careem after the company was acquired by its regional rival Uber, the head of Turkey's United Taxi Drivers Association said.

Ordinary yellow taxi drivers in Turkey have been in a battle with Uber for more than a year, a conflict which has at times led to violence between yellow taxi and Uber drivers.

Almost 18,000 taxis operate in Istanbul, the country's largest city. The arrival of Uber onto the market in 2014 led to high tensions and calls from yellow taxi drivers to ban the app in Turkey.

"Uber is PKK, ISIS, a terrorist group born in San Francisco, from where traitors martyr our soldiers in Afrin. Those using Uber are traitors to Turkey," tweeted Irfan Ozturk, head of the Istanbul Taxi Union, last year in an extreme example of metered taxi drivers' rage for the app.

An effective ban on Uber was eventually realised last year when the government authorised heavy penalties for providing unlicensed taxi services.

Such calls have also been heeded in other countries in the Middle East, such as Jordan, where protests from yellow taxi drivers led to the ban of Careem in 2018.

banned both Careem and Uber last year for a few months before announcing the companies would become subject to regulations. Likewise, Careem was banned by the Palestinian Authority in 2017 and was allowed to operate only after agreeing to set its fares the same as metered taxis.

However, metered yellow taxis are often subject to frequent complaints from customers across the region, many of whom say they prefer ride-sharing apps like Uber and Careem for having a better quality of service.

Uber and Careem also meet a more simple demand than quality - quantity. While the number of licensed taxis in Istanbul has remained roughly the same since 1965, the population of the metropolis has exploded from 2 million to at least 15 million people.

Most of Istanbul's taxis are now rented at around 7,500 lira a month ($1,382) and are split between multiple drivers as the cost of taxi licenses has increased exponentially to 1.7 million lira a year in 2018 ($313,000 at today's exchange rate).

The high cost necessary to operate a taxi has promoted harassment, meter manipulation, riding in circles, and other poor behaviour by drivers looking to drive up fares, some customers say.

Despite the crackdown, Uber and Careem drivers continue to operate in countries across the region.

The UAE-founded Careem operates in 98 cities across the Middle East, North Africa, Pakistan and Turkey.

"We are through with Careem. There are about 1,500 Istanbul taxis using Careem. This move of Uber is aimed at entering Middle East markets. Because Careem is dominant in the Middle East, they have bought it," Huseyin Duman, head of the United Taxi Drivers Association told Hurriyet.

While initially taxi drivers in the country also directed their ire towards the customer-grabbing Careem app, the company made a deal with the Chamber of Istanbul Taxi Businesses in January that it would only work with yellow taxi drivers to provide its service in the city.

Under the $3.1 billion deal announced on Tuesday, Careem will become a wholly owned subsidiary of Uber but will continue operating independently. Careem will retain its branding, services and separate app.

That distinction makes no difference for Duman who says now Careem has been acquired by Uber, which continues to be a target of anger for yellow taxi drivers, taxi drivers will cease working with the service.

Duman also claimed that taxi drivers in Morocco and Palestine have protested the merger, and anticipated that Uber would soon be permanently gone from the Turkish market.

Not everyone in the taxi business is angry about the Careem-Uber deal.

Hundreds of workers at Careem were made millionaires after the company was sold to Uber, The National reported.

The company's 4,000 employees all have stock options and their shares in the company will be bought as part of the deal, making 200 of the Dubai-based workers millionaires in Emirati dirhams, with 1 million dirhams equivalent to $272,000, and 75 workers millionaires in US dollars.

However, the lucky overnight millionaires do not include any of Careem's drivers, who are not officially employed by the company.