Why Uber stopped its operations in Israel

Online taxi service provider Uber has announced its exit from the Israeli market after failing to build a sufficient market share in the Middle-Eastern country.

The announcement was made on Thursday night (June 15), although taxi drivers in Israel had been notified of the company's decision a few days earlier. According to a message sent by Uber to its taxi drivers, the company will cease operations in Israel on June 23.

Uber stated that approximately four of its employees in Israel and 1,000 private self-employed contractors will be affected by this decision. The current number of drivers working with Uber in Israel is 6,000.

Uber CEO Dara Khosrowshahi said that Uber will only invest in markets where it can become the first or second largest player.

Reasons for Uber's exit

Uber faced intense market competition from two other companies in Israel: Israel's Getto taxi service and Russia's Yango taxi service company.

Uber launched its operations in Israel in 2014 and has encountered various challenges since then.

In 2014, the company introduced the Uber X service, which allowed any vehicle owner to become an Uber driver for a fee, even if they were not a licensed taxi driver. This move received criticism from taxi drivers in Israel and the Israeli government, who raised concerns about unlicensed drivers working for Uber.

As a result, the Uber X service was discontinued. The company attempted to restart the service but was unable to obtain the necessary permissions.

Israeli laws and operational difficulties

Uber faced challenges due to Israeli laws and regulations. Although Uber performed reasonably well compared to its competitors, it struggled to achieve significant growth and remained in the third, or last position among taxi service companies.

Uber operated only 6,000 taxis in Israel compared to the existing 40,000 taxi vehicles in the country. This meant that Uber held an insignificant share of the Israeli market.

Furthermore, Uber's main goal in the Israeli market was to promote its Uber X service, which it launched in 2014. However, the company faced numerous legal obstacles that hindered its ability to expand this service.

Uber decided to exit the Israeli market because it was unable to achieve considerable growth and faced stiff competition from local and international taxi service providers. Additionally, the regulatory challenges and limited market share led Uber to conclude that continuing operations in Israel was not viable. As a result, the company made the strategic decision to withdraw from the market.