Uber said on Sunday that it and rival Careem are shuttering their services in the United Arab Emirates capital of Abu Dhabi.  The ride-hailing service said it is closing due to “unforeseen circumstances,” suggesting possible issues with local authorities.  The company has been operating in the Emirates since 2013.

Uber
P1020463.JPG by aaronparecki on 2015-01-13 16:13:09

What caused the suspension?

Uber said the move is temporary, and it plans to share more details in the next few days. The San Francisco-based company did not give the reason that prompted the decision to suspend the service.

In a statement, Uber said, “We want to let you know that this was a decision taken by both companies, and our goal is to resume operations in Abu Dhabi as soon as possible.”

Meanwhile Careem – Uber’s Dubai-based rival – told The Associated Press that it made the decision to suspend operations after authorities stopped some of its cars.

The Dubai-based company told the AP, “Until we have further clarification on the situation, Careem has decided to temporarily limit services in Abu Dhabi to avoid any inconvenience this may cause.”

The National — an Emirates newspaper – reported that about 50 drivers were arrested over the weekend. Citing an industry source, the report said there appears to be some confusion about why the drivers were detained.

The National quoted the head of Abu Dhabi’s taxi regulator TansAD, Mohamed al-Qamzi, as saying, “They are bringing customers to limousine companies, which we encourage, but they don’t have the freedom to set prices where they are in competition with the taxis,” he said.

Media reports suggest the suspension could be blamed on the ongoing pricing dispute with the regulator. As of now, there has been no comment from the Abu Dhabi Department of Transport. It must be noted that in the Emirates’ largest city of Dubai, which is governed by a separate transport regulator, the operations remain unaffected by the suspension.

Uber struggling with international operations

Both Uber and Careem launched their services in Abu Dhabi about three years ago, and both operate through mobile apps. Both are allowed to work with only licensed drivers from 18 registered limousine companies, and they can’t compete directly with the city’s taxi companies. Most of the local taxi companies are owned by influential local families or are operated by the government, explains RT.com.

Uber, which raised $3.5 billion from Saudi Arabia’s Public Investment Fund, is investing heavily in its operations in the Middle East, but it is struggling with its international operations. In the U.K., the company has been sued by two of its drivers, who are demanding holiday and sick pay. The company has been banned in Taiwan and is accused of not operating lawfully, notes BBC.

Recently it sold its Chinese operations to Didi Chuxing, a dominant ride-hailing service in the country. Last week, the company posted a loss of $1.2 billion for the first six months of 2016, blaming the dismal performance on driver subsidies. Uber allows users to order rides and pay using its smartphone app.

Photo by aaronparecki