ISLAMABAD: Uber said on Tuesday it was closing down its operations in five key Pakistani cities, namely Karachi, Multan, Faisalabad, Peshawar and Islamabad, saying its subsidiary brand, Careem, would continue to serve these stations.

The announcement from Uber comes at a time when, after a record year of Pakistani startups raising $350 million in venture capital funding in 2021, reality set in in 2022, with major companies announcing they were reducing services and laying off employees due to sluggish economic activity and amid rising fuel prices and inflation.

Earlier this year Careem said it had suspended its food service in Pakistan and would focus on its ride-hailing and delivery segments only. Separately, app-based bus service Swvl has said it was “pausing” its service in Karachi, Lahore Islamabad and Faisalabad due to the “global economic downturn.”

But in the biggest shock to the Pakistani startup scene, on July 12, 2022, Airlift, the country’s first would-be unicorn announced that it was shutting down permanently. The company’s investors had pulled out of a fresh funding round, and around 300 corporate employees, and thousands of warehouse and delivery staff, were jobless overnight.

“We have made the decision to no longer operate the Uber App in Karachi, Multan, Faisalabad, Peshawar and Islamabad as of October 11, 2022. Riders and driver partners may use the Careem app in these five cities,” Uber said in a statement.

“The Uber app will continue to be available in Lahore with new product launches to support earners during these difficult times.”

The company said it would continue to communicate with riders and driver partners who used the Uber app in Karachi, Multan, Faisalabad, Peshawar and Islamabad about how they could use the Careem app in their city instead.

“When we acquired Careem, it was always our belief that the two companies could come together to complement each other’s strengths and better serve the region through tailored experiences,” the company said.

“We know this is a difficult time for the teams who have worked incredibly hard to build this business over the past few years. We greatly appreciate everyone’s contributions and our priority is to minimize the impact to our employees, drivers, riders, and Hero partners who use the Uber app during this change in Karachi, Islamabad, Faisalabad, Multan and Peshawar.”