Uber set to launch operations in Pakistan

Published: October 28, 2015
Email
PHOTO: REUTERS

PHOTO: REUTERS

In what is surely a huge development for Pakistan and its emerging tech economy, Uber — the disruptive taxi-hailing service app which has taken the world by storm in recent years — is all set to launch operations in Pakistan.

“We can confirm we are currently recruiting for a team in Lahore, and are very excited about launching in Pakistan as we see huge potential in the way we can help people move around their city safely and reliably,” Shaden Abdellatif, communications manager for Uber’s Middle East and Africa operations told ValueWalk, an online publication.

“We are also excited about the opportunity for economic empowerment we can bring to the drivers we partner with,” Abdellatif added.

Pakistani entrepreneurs launch ‘Uber for rickshaws’

This development came to light after the company’s career page listed three vacancies in Pakistan, specifically Lahore. The three positions form what industry insiders refer to as Uber’s expansion ‘troika’: a general manager, operations and logistics manager, and a marketing manager who are put in place before Uber launches into a new market. It is already operating in hundreds of cities worldwide.

And while Uber’s arrival is generally exciting news for the country’s startup scene, we also wanted to know what existing players – ones who already occupy the online app-based taxi space in Pakistan – had to say about the development.

The first company we spoke to is itself a recent entrant and an offshoot of an international company, albeit one without the reputation and financial backing of Uber – Careem. Careem itself has just relaunched in Lahore hiring local turnaround expert Junaid Iqbal, to try and grow the company after having failed to make much of an impact in its first try at cracking the market back in April of this year.

Uber’s global success has spawned competitors around the world, many of which now rival Uber in certain markets. In neighbouring India, Ola cabs – a company started by an IIT graduate has received hundreds of millions of dollars in funding and is beating Uber at its own game. Similarly, Didi Kuaidi, a Chinese home-grown Uber, has also raised several billion dollars and is dominant over Uber in marketshare there.

Pakistani researchers develop solar-powered mobile phone network

Careem is another Uber-clone but one that has so far focused on the Arab market. What makes its arrival into Pakistan even more interesting is that one of its co-founders is a Pakistani based in Dubai.

“We were expecting Uber’s arrival. Competition is good and we are really excited about their announcement,” said Managing Director Careem, Junaid Iqbal, while talking to The Express Tribune.

Not exactly the response we were expecting, so we asked Iqbal why the imminent arrival of Uber has caused such a stir here.

“Uber’s arrival will only help develop the ecosystem and speed up the adoption of sharing/on-demand economy in Pakistan. It also brings the right kind of attention to our country,” said Iqbal.

 In driving seat: Pink rickshaws take to the city roads

When asked about the now inevitable proposition of competing with a company that is believed to be currently valued at around $70 billion – twice the total market cap of all companies listed on the Karachi Stock Exchange – Iqbal simple replied, “The pie is big enough for everyone.”

He was also quick to point out how Careem had no shortage of funds at its disposal with a working model already in place in the Middle East and North Africa.

“We are in the process of getting some serious backers on board. “We are behind Uber in some countries in the region, … in some they are behind us and in some we are head-to-head.”

Careem raised $10m last year in its second round of funding – a significant contributor being Al Tayyar Group, a Saudi conglormerate.

So how exactly will businesses, such as Careem, compete with a behemoth like Uber? According to Iqbal, the key was in ‘localisation’.

Junaid Iqbal

“Our target market is from Morocco to Pakistan, hence our solutions and products are more localised. In terms of product, Uber offers NOW bookings. We offer both NOW and LATER bookings. With Uber you book through the app. With us you can book thought the App, Call Center and Website,” Iqbal said.

EasyFix, India’s Uber for repair and maintenance, raises seed funding

He went on to add how Careem’s approach would also be different in terms of payments. “In most markets. Uber offers credit card payments. We offer credit cards, cash and invoice payments (for corporate clients),” he added. However, having faced this same issue in cash-based India, Uber is adapting from its global model and allowing cash payments in that country and may very well do the same in Pakistan.

Careem isn’t the only player in the local market. Madeeha Hassan’s home-grown Savaree is among numerous others also trying to enter the ‘Uber’ ride-sharing and taxi space.

“It’s very exciting. It only validates the work we’ve been doing,” Madeeha says when asked about her thoughts on Uber entering the Pakistani market.

Madeeha Hasan

“There is a huge trust and culture issue. More importantly, there is a huge security issue,” she said, adding that Savaree was diligently working on this issue and doing things ‘differently’ when it came to ride sharing in Pakistan.

Going against the more formulaic positive announcements, the former head for Rocket Internet’s Easy Taxi service in Pakistan – yet another Uber clone that shut its operations earlier this year in Pakistan after failing to make a dent in the market, Adam Ghaznavi, was a little more pessimistic when asked what Uber’s arrival spelled for local competitors. “I think the security situation is always overestimated in Karachi and underestimated in Lahore,” he added.

Ghaznavi says the biggest problem in Pakistan is usage. “If you put all the numbers in a spreadsheet, it all looks great. But when you come down to doing it, it never really goes as planned,” he added.

Ghaznavi also managed to execute a little prank –  adding more drama to Uber’s announcement – or what he called “an out of the box strategy at creating pre-launch brand recognition” for his new web marketing company, by posting a status on Facebook saying, “Uber starting its operation in Pakistan and guess who is the next GM.”

Pakistan-based real estate portal raises $9 million in series B financing

He later apologised for the post. “I’ve been getting calls nonstop. My dad just called me to congratulate me. Things clearly got out of hand,” he told The Express Tribune.

According to The New York Times, Uber is now the world’s most valuable private company, and a valuation of $70 billion would make it worth more than General Motors and Ford.

Careem, Savaree and many others are all in the game for that very reason: to get a piece of the action in Pakistan’s virtually untapped online ride-sharing market.

Some may also just be in it for the quick buck. “It could be one of the options available to us. At this point, we have nothing to lose,” said Madeeha when asked if her company would be willing to sell its operations to Uber.

But the real question is whether Uber – a company that has taken on governments, competitors, taxi drivers, tax authorities, journalists (and won) – is willing to share any of the pie at all.

Facebook Conversations

Reader Comments (14)

  • Ravian
    Oct 28, 2015 - 4:02PM

    Uber can be game changer if they come with metered taxis. The current players such as metrocab, HITZ etc make their customers pay exorbitant rents.Recommend

  • Ch. Allah Daad
    Oct 28, 2015 - 4:54PM

    As there is no reliable Taxi service in Lahore, therefore its a good news for people of Lahore. Good luck and be aware of corrupt local administrators and riders with fake identities and credit cards. Pakistan is a graveyard of many great systems and ideologies. It could be beginning of end too.Recommend

  • Asif
    Oct 28, 2015 - 5:16PM

    Uber requires a payment method, either charging Credit Card or Paypal. There are no Pakistani banks allowing internet merchant services and Paypal does not exist so how will the funds be settled for Uber transaction.

    I say keep dreaming!!Recommend

  • Salman Khanzada
    Oct 28, 2015 - 7:26PM

    Validates the model, pie is big enough, we are excited about the competition are great statements but they belie the real tension and heat these entrepreneurs are going to feel shortly.

    Local companies as a Pakistani I am with you but get ready for competiton and give Uber a run for its money! May God be with you. Recommend

  • Adeel Bajwa
    Oct 28, 2015 - 7:40PM

    @Asid,
    Have you ever heard of IBFT – Inter bank funds Transfer??Recommend

  • ibs
    Oct 28, 2015 - 8:25PM

    @Asif. Please educate yourself. In the south asian markets they work via cash too. Good morning.Recommend

  • SNKN
    Oct 28, 2015 - 9:14PM

    @ Asif

    Looks like you are not too aware of banking capabilities in our country… Recommend

  • Humza
    Oct 29, 2015 - 7:18AM

    @Asif: I don’t think you know much about banking in Pakistan.Recommend

  • Aamir
    Oct 29, 2015 - 8:07AM

    Good to know it… Please come to IslamadRecommend

  • Oct 29, 2015 - 9:28AM

    An organized transport system is what is very badly needed. Über’s entry will at least bring some relief to the transport mess, though not very significantly. Why? For the simple reason, traffic jams, petrol costs, and haphazard driving. Nevertheless, corporatization with a will to be succeed will be helpful. Salams Recommend

  • ABC.
    Oct 30, 2015 - 1:41AM

    Uber was kicked out of Germany for failing to bring the participants in national tax system. I wonder how this system survives in other countries.Recommend

  • Muhammad Zulfiqar
    Oct 30, 2015 - 8:20AM

    Great idea! But few queries about uber.
    Who to contact Contact person in Pakistan?
    What are basically modalities of it finances and operational methodology? Recommend

  • Nov 1, 2015 - 9:25PM

    Why is it reminding me PM’s Old Yellow cab relaunched as rozgar scheme. In Lahore it can really be a great service. Thumbs Up for a dealership with a few luxurious car dedicated for such collaboration.Recommend

  • Iqbal
    Nov 27, 2015 - 12:55PM

    Respected Sir

    We are very much pleased that you are launching the Uber Rikshaw services here in Lahore. I am already in this business and have a own fleet of ten rikshaws. I am much interested to share my own experience of this business with you and also want to learn more about your business plan. I am also interested to become a partner of your business.
    I have M.Phil Degree in management sciences and also a handsome experience of fleet management.

    Please tell me how I can contact you.

    regards

    Iqbal hussain Recommend

More in Business