Ride-hailing app strives to stay afloat

High fuel prices, fierce competition changing industry dynamics

LAHORE:

A ride-hailing app is striving to keep its business afloat in Pakistan by re-categorising its client base as rising fuel prices coupled with stiff competition are changing the industry dynamics.

In these inflationary times, customer preferences have changed and many of them have shifted towards cheaper modes of transportation like auto or bikes, Careem General Manager Imran Saleem said while talking to The Express Tribune.

“We are focusing on new avenues in Pakistan to keep our captains engaged. One of the avenues is engaging with corporates and other such businesses to provide inter-city mobility,” he said.

“We are also trying to engage more female riders for our bike services, so that women travellers can take the benefit of our services at much cheaper rates. This will help in creating a women-inclusive workforce, thereby breaking stereotypes in society.”

During its six years of operations in Pakistan, the company has paid $500 million, or half a billion dollars, to its captains. Its management said that out of the total 2.5 million captains in the region, some 820,000 are registered with its app.

“We have already expanded the number of our services in Pakistan since we are a technology company but ride-hailing services are still the key contributor,” said Saleem.

In 2016, California-based ride-hailing app Uber Technologies and Dubai-based Careem entered Pakistan with their smart services and received immense response to the offer of cheap and sustainable modes of transportation to the people of key metropolitan cities.

The apps expanded to second-tier cities with further diversification of services because of stiff competition between them.

However, in January 2020, just before the Covid-19 outbreak globally, Uber acquired Careem networks for $3.1 billion and the latter became a wholly owned subsidiary of Uber Technologies.

Since then, Uber has restricted its ride-hailing operations in Lahore, the city from where it kicked off services in Pakistan. However, Careem is providing services in 10 other cities.

Saleem stated that Careem has diversified its services portfolio since 2020 as it switched from a ride-hailing app to a super app.

“We did close down some of our services that we initiated during Covid but our core business is still ride-hailing services,” he said.

“The company is currently running in profit but this gain has been achieved after a reclassification of our services mechanism and we will look into more such opportunities as we are here to stay.”

Published in The Express Tribune, February 25^th, 2023.

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