The popular ride-hailing company, Careem is suspending its food delivery service in Pakistan in light of economic instability. According to a spokesperson, the decision was made to emphasise satisfying consumers’ delivery and ride-hailing demands.
The company confirmed the news on Thursday and released the first official statement, albeit the spokesperson did not exactly specify which economic factors prompted the firm to hit a pause on food service. Citing nebulous causes such as the global economic downturn, the official stated that the company could not “burn cash” on the food delivery service it just recently introduced. He also denied clarifying whether Careem services in Pakistan have reached profitability.
Careem started its food delivery service in Pakistan in Karachi in 2019, followed by Lahore in 2020. So indeed, hundreds of restaurant partners will suffer as a result of this “halting” decision. However, the spokesperson also added in the statement that “when the economic situation improves, it will attempt to reinstate the service again in the future”. Thus, the firm does appear to relaunch the service as soon as the “economic condition” stabilises.
Meanwhile, Swvl, a prominent bus service, also announced in the past week that it would pause its service in some of Pakistan’s major cities from June 3 due to the start-up ecosystem.
The rupee, a key component in the cost of production for virtually all industries, has been on an extraordinarily volatile ride since the beginning of this year, making economic conditions in Pakistan less than ideal, particularly for businesses. Simply put, it looks like the national economic crisis has put many businesses at a disadvantage. Thus, the Government of Pakistan must take appropriate steps to reduce economic uncertainty and help these businesses stabilise.