Pakistan is the next target of the ride sharing giantNovember 17, 2016
Uber is the leading online transportation network in the United States; its service operation is spread in 60 countries and four hundred and four cities in the world. The company has plans to launch the service in Lahore in Pakistan. Three years ago, the city received its metro bus system as the mass transportation and is used by three hundred thousand passengers every day.
According to the news report, the car sharing service will start in Lahore and will expand its operation in other cities in the country. Lahore is developing into a modern city with the world class transportation system, like the mass transit train and metro bus service for the tourists and travelers. The car sharing offers its users the mobile app with which they can request for the ride sharing service.
The ride hailing service in Pakistan
The launch of the car sharing service in the country reveals more about the preoccupation and the pressure point, the company faces many unexpected issues like the lower wages and high cost of the car ownership that offers a captivating perception into the role of the car owners in the sharing economy and the current political economy. More than the drivers, the wealthy people in the country see the car sharing platform as an investment opportunity and they have even created the incentive systems that destructs the quality of the service.
In an aim to create a good business service, the company entered into Karachi and Lahore, the two biggest cities in Pakistan. The car sharing service was of greater demand in both the cities because of the increase in the cost of the vehicle ownership, shared public transport system, weak while the ride sharing service from Uber offers the consumers a reliable, safe and affordable taxi service. The Head of communication in Uber, Shaden Abdellatif said that the launch of the service in many other countries like North Africa, central Asia and Middle East and in Pakistan is a part of the two hundred and fifty million dollar investment plan and the other reason is that the company struggles in the Chinese market.
The ride sharing company introduced its uberGo service in Lahore with the low cost fare at thirteen US cents (13.7 Pakistani rupees). Uber’s Head of Communication said that this low pricing will attract many users to hail in the car service. The company also have introduced the cash payment system in the country, which a new approach taken by the company because the credit card system is rarely used by the public.
Challenges faced by the ride sharing operator
While the car sharing service has high hopes in the country because of the transportation demand, there are certain challenges the company has to face while operating in the country. One of the lowest data penetration rate in Asia is Pakistan and since the company’s service solely depends on the internet connection, the car sharing service has to face many technical discomforts while operating the service. The company also has a local rickshaw competitor that uses the SMS messaging service because the country has one hundred and thirty million mobile phone subscriptions, while only twenty one percent of the population subscribe to internet package.
The rickshaw company has more than one thousand drivers in Lahore and many people rely on the service because of the low cost and that it is easy to hail in the busy and traffic streets. The company works polling the driver’s location using the mobile phone towers and matching the rider’s location using the received message using the Google Maps. The other biggest taxi rival is Careem, that has its headquarters in Dubai, operates in twenty nine cites in Pakistan and it also raised sixty million dollars in the funding last year.
And the other reasons are the safety of the drivers and the riders because of the Taliban insurgency and high criminal rate, and the security concerns of the women those who work for long hours. Because in India the ride sharing service was shut down for some time, after an Uber driver filed in rape case.
The drivers working for Uber will undergo a strict screening and verification process and they will have to be with clear criminal records. It is mandatory for the drivers to attend the training program that aims to increase the awareness on sexual harassment and women’s safety.
The training program lasted for an hour and it will be conducted for all the new joiners, it will educate the drivers about what constitutes sexual harassment and the drivers were given instructions not to harass the riders. The drivers were also warned not to contact the contact the passengers after dropping them in their destination and not to pass the passenger’s contact numbers to fellow drivers.
The seminar was conducted by RABTT, an enterprise based in Pakistan. The main aim of the seminar was to educate the drivers that harming and assaulting other person alone is not sexual harassment, but any act that makes the other person feel uncomfortable is called sexual harassment. A study report released by the International Labour Organization states that about 75% of Pakistani women are unemployed because of the lack of secured transportation service.
There were several initiatives taken by the Pakistani government to make women feel comfortable and independent to work by introducing a program in Lahore called the ‘Women on Wheel’, it is an awareness campaign that focused on the problems of violence and sexual harassments, and ‘Pink Rickshaw’ is a program that allows the women to buy vehicles and hail other women.
When there are no rides, the drivers will face economic discomfort and to protect the drivers from these kinds of activities, Uber gives the drivers a compensation of $2.60 (270 Pakistani rupees). Even the car dealership and the rental companies identified the blind spots from the Uber map and offered the service with their available vehicles. Here the cars are rented to the hired drivers who pick up the ride; the ownership of the fleet is endorsed by the ride sharing company, while the compensation is taken care of by the car owners.
This type of business model is different from the western, where the driver and the owner of the car is the same person and this is seen in markets were the rate of ownership is very high and the financial support is given by Uber or through bank loans, while in other markets the vehicle owners charge a monthly fare. And in Pakistan many drivers are not owners, but are employees working under the car owners with fixed salaries. Since the drivers receive a fixed salary, they earn the same amount regardless of whether they offered service or not.
The car sharing service offers its service in two major cities and plans to extend the service depending on the demand of the service among the public. The next service station for the ridesharing service will be Islamabad and its adjoining city, Rawalpindi. Apart from these two cities, the car sharing company focuses on locations that have more population of three to five million people with the lack of proper transportation service, so the next set of cities will be Hyderabad, Multan and Faisalabad.
The company is also planning to introduce new projects like UberAuto and UberMoto in the country.