Islamabad: Competition Commission of Pakistan (CCP) approves merger of ride-sharing app companies Uber and Cream.
It also imposed stringent conditions on newcomers and competing companies in the market to facilitate the ride through mobile applications.
These terms will continue to apply to Uber for 3 years from the integration of Uber and Cream or until a competitor enters the market meaningfully.
Meaningful entry will be when one or more of the ride-hailing companies introduce their services in Pakistan and individually receive 25% market share or 33.3% ride-sharing rides weekly for a total of 3 consecutive months.
This condition will also give rival companies an opportunity to flourish in the ride-hailing business, and the merged company will not misuse its dominance.
Competitive Commission Pakistan initiated the second phase of this merger review as a result of the decline in competition in the marketplace for the convenience of riding through mobile applications.
In the second phase, the Competition Commission imposed certain conditions on Uber to address the competitive concerns that may arise with regard to price increases for services or products, discrimination costs, reduced quality of services, and possibly lack of innovation.
The commission imposed a "non-contractual exception" on Uber so that drivers or captains were free to provide their services on the custom ride-sharing app.
The Uber company will be obliged to keep contract service fees up to 22.5 to 25.5 percent for all Oberoi and Ober Money drivers across the country.
In addition, the CCP directed Uber to charge 12.5 percent of its total organic fair annually to protect consumers from unnecessary growth.
In addition, it was directed to increase the fare only by two and a half times during rush hours or at pack time.
CCP directs the technology company to appoint 10 engineers to work on research and development activities focused on services and products, citing concerns that Uber will bring business innovation after integration.