Uber Technologies Inc (NYSE:UBER) is pleased with the Egyptian Competition Authority’s latest move. The body decided to approve the company’s pending acquisition of Careem.
It has been a troublesome path for the company characterized by a conflict between it with the body. This conflict has been ongoing for quite a long period. The recent nod by ECA is great news! However, it comes with several conditions.
The Egyptian Competition Authority says it has many responsibilities targeted at striking a good balance in the market. The first responsibility is to guard for the existence of a competitive environment. Many parties entrust the body with their well-being in this regard. Some of these include consumers, drivers, passengers as well as the small and medium-sized business entities.
The second responsibility and which is equally important, is the quest to safeguard the interests of current and potential investors.
This body sets in place various controls to oversee matters. One of the ways has always been efforts to put in place maximum service fees for a select group of drivers. These are, specifically, the ones fail to exceed the prevailing 22.5% set in place by the Uber X service. The same applies to those that fail to conform to the 22.5 percent that guides the Careem-Go services.
The turn of events
It was in March that Uber pronounced its plan to buy off the Dubai-based business enterprise. The matter reached the ECA, which moved with speed to bar the plan. This body said that the two businesses needed to abide by regulations and controls before moving ahead to strike the deal.
It is several months down the deal from the point the body barred the deal. It has finally accepted the deal to progress, saying that it had enough reasons to stand on the way of the deal. According to the body, these two businesses had gone against the set rules by striking a deal without seeking prior permission from it.
Uber needs to conform to the regulation of not tying the Careem services with its services to each other in an exclusive way. The company should also follow the rules that target promoting the market growth.