Uber to exit Israel as market share disappoints

Uber said Thursday that it would exit the Israeli market because it had not achieved sufficient market share, underscoring the highly competitive ride-hailing and delivery environment in the Middle Eastern country.

Reuters reported that Uber CEO Dara Khosrowshahi said that Uber will only invest in markets where it could be the first or second-largest player.

Why it matters: The move marks the behemoth of the ride-hailing world's exit from a key Middle Eastern market. In Israel, Uber is trailing behind Israeli-founded Gett and Russian taxi company Yango when it comes to taxi and private vehicle hire. Last month, Yango Delivery partnered with DelivApp to speed up deliveries and make them cheaper.

“We have made the difficult decision to discontinue our mobility business in Israel. This is in line with our efforts to focus on markets where we have opportunities for sustainable growth. Our No. 1 priority now is to support our teams as well as our mobility partners on the ground,” an Uber spokesperson told Al-Monitor.

Uber will close down its taxi and ride-sharing services in Israel on June 23, Al-Monitor understands. Uber Eats is not operating in Israel.

The company, which mainly relies on self-employed contractors for its delivery services, said its four employees in Israel and around 1,000 non-employee taxi drivers would be impacted.

Uber was not growing as expected in Israel due to the strong competitive landscape.

Background: Uber has been beset by legal challenges against it operating in Israel. In July 2022, it relaunched operations in Israel, five years after a court blocked the company’s initial activities in the country. In 2017, the court ordered Uber to stop operating in Israel because it used private drivers who were not licensed to drive taxis. The company also lacked appropriate insurance for passengers, the court ruled.

The company returned to Israel last year by connecting a nationwide network of licensed taxis, but Uber failed to catch up with well-established competitors Yango and Gett.

Know more: Uber’s main driving markets are in Europe: France, Germany, Spain and the United Kingdom.

But the car-hailing and delivery company also said Thursday it would wind down its Uber Eats food delivery business in Italy, after not building enough of a market share.

Uber said around 50 staff and thousands of non-employee couriers and restaurants would be affected in Italy. The company said it would continue to grow its mobility service in Italy where it works with ride dispatcher IT Taxi.