Uber Technologies Inc will discontinue its ride-hailing services app in five cities in Pakistan including Karachi and Islamabad, the company said on Tuesday, in a move that will reduce market overlap between the U.S. firm and its Middle East unit Careem.

The change, effective immediately, also covers the cities of Multan, Faisalabad and Peshawar, but the Uber app will continue operations in Lahore, where the company plans to launch new products.

It said drivers and riders in the five cities can switch to the app run by Careem, the Dubai-based company it purchased for $3.1 billion in 2019 to dominate the ride-hailing markets in the Middle East and Pakistan.

The exit comes as the South Asian country faces an economic meltdown exacerbated by devastating floods this summer that killed more than 1,700 and caused an estimated $30 billion in damage.

Uber said in a statement it would prioritize minimizing the impact to its employees, drivers, riders, and partners who use the Uber app during this change in those cities.

  - Reuters