One of the most popular ridesharing apps in Bangladesh, Pathao has recently launched an ad campaign to discourage riders from sharing rides without the app. Passengers are seen taking rides without the app in most of the metropolitan cities including Dhaka. On the other hand, users usually complain about not finding a bike during an emergency and for being charged extra. Since the ridesharing startups have started their operations in 2016, it has been a relief for the commuters as commuting has become much more comfortable. However, the tendency of riders to provide rides without apps has made using these platforms an inconvenience for the users, and the start-ups offering ridesharing services are also losing revenue. But why are riders reluctant to use the app despite having the advantage of connecting with passengers using digital technology through the app?
Overview
Ridesharing in Bangladesh started its journey on May 7, 2016 through an app named “Share A Motorcycle” or SAM. In October of the same year, Uber started its operations in Bangladesh and in November Pathao launched their ridesharing service. Witnessing the popularity of motorcycle ridesharing in Bangladesh, Uber launched their bike ride sharing service UberMoto at the end of 2017. According to a study by the Policy Research Institute (PRI), in 2018, 23 percent of the country’s transport sector was occupied by the ridesharing industry. By registering 2,500 riders every week, in 2018 alone, about 1 lakh riders partnered with Uber. The Business Standard (TBS) reported that according to a ridesharing industry insider, in 2021, Pathao is leading the country’s bike ridesharing market with 70% and the rest is owned by Shohoz and Ubermoto.
Ridesharing startups in Bangladesh were growing and expanding their activities outside Dhaka in various cities like Chittagong, and Sylhet, until the announcement of a nationwide lockdown during the Covid-19 pandemic in 2020. Due to the lockdown, the ridesharing platforms had halted their operations for a long time as per government directives. After lifting the lockdown and announcement of the new safety policies, these platforms resumed their activities. During that time many passengers and riders were seen sharing rides without using the apps.
Even before the lockdown, it was often seen that the riders were giving trips without using any app. But, during the entire period of lockdown, the riders who rely on ridesharing have provided ridesharing service to the passengers without using the apps.
Even after lifting the lockdown, the tendency to share rides like this has not decreased and this rate is constantly increasing. In many cases, it is seen that some riders are providing rides outside the app but not abandoning use of the apps completely. Many see such a situation as a threat to the sustainability of the country’s ridesharing industry. Which is why, one of the most valuable startups in the country, Pathao, has launched their new campaign.
In October 2021, TBS published a report on whether UberMoto will leave the Bangladeshi market like UberEats. In June 2020, Uber discontinued its UberEats service in Bangladesh. Industry experts have blamed the high operating cost and the low probability to sustain in the existing market competition for discontinuing the service. For a long time, ridesharing startups in the country have not received any new investment. Riders not using the apps to share rides is making it very difficult for the companies to run a sustainable business. But, there are several reasons for riders in Bangladesh to share rides without using these apps.
Reasons for Not Using App
Weak Enforcement of Rules
According to the “Ride Sharing Service Policy” published in 2018, a vehicle owner can only register on one ridesharing platform, which allows them to legally share rides only through that specific platform.
According to another rule a vehicle owner cannot start sharing rides unless the vehicle has been registered for at least one year. It is very difficult for riders to follow such rules, because some of them register on multiple platforms, while some buy motorbikes for the sole purpose of earning through ridesharing.
In Bangladesh, it is illegal to use a private vehicle commercially. But on one hand, it is impossible for many to follow these rules and regulations, and on the other hand, enforcement of the rules and policies are almost non-existent. As a result, riders have the option of providing services on several platforms, as well as providing services without using any platform at all. Much of the problem can be solved if the regulatory authority takes the initiative to formulate the ridesharing policies in a way that is convenient for all the parties concerned and enforce them thoroughly.
High Percentage of Commission Charged
The majority of riders complain that the apps charge extremely high rates of commission. Currently, Uber charges a commission of 25% of the fare and Pathao charges 15%. Riders in our country have been demanding to reduce this charge to 5-10 percent. Although, in the case of Uber, the commission structure is the same worldwide. Among other ridesharing apps besides Uber, Lyft and OLA both charge 20% commission. But, in some regions OLA charges 18% commission.
However, in the ridesharing industry in different regions, the commission structure is almost the same for most companies. But, drivers in different countries, including Bangladesh, have been complaining about the commission rates. As a result, drivers in many countries are sharing rides without apps, just like in Bangladesh, and the riders have blamed the high commission of the app for this. According to CNBC, Uber is planning to increase the fares in London to encourage more drivers to use their app. In that case the fare for the passengers may increase a bit, but in many instances the fare would still be lower than that of taxis or other commercial transports. Additionally, there is the convenience of using the app. Therefore, due to this extra fare, it will be possible to increase the income of the drivers while still keeping the commission structure unchanged.
Unable to Cover Costs
In some ride sharing apps, the riders do not have the option to choose the direction where they want to take passengers. Which might result in riders getting passengers in a different direction than their desired destination. But the basic concept of ridesharing was that if a rider is going somewhere and finds a passenger who wants to go the same way, then he can take that passenger on his way and earn some extra money. But as this option is unavailable, some of the apps are indirectly pushing riders to provide transport services commercially.
But fares on rideshare services are often lower than commercial transports. As a result, it is often not possible for riders to cover all their costs after providing ridesharing services in a commercial manner. Even if the cost can be covered to some extent, platform-based ridesharing often cannot be a source of sustainable income for riders. On the other hand, while serving outside a platform, the riders have the negotiation power and since there is no extra commission to be paid, they get it all to themselves. This is why riders are sharing rides without using any app.
Tech Issue
Ridesharing through apps require a rider to have a smartphone and stable internet connection. Despite having 4G service available in Bangladesh, there are still issues in many areas regarding good internet connectivity. Besides, some riders face problems with battery charge on their phone and technical issues in the app. Which results in inconvenience for both the rider and the passenger. Seeing the growth in this sector many people from outside Dhaka are coming to earn their livelihood through ridesharing. Some of them are less educated or technologically challenged. Also there are many elderly passengers who are technologically challenged or are not comfortable using technology. As a result, riders as well as many passengers are more comfortable to share the ride without apps.
Time Required to Make Payments to the Drivers
According to a report of Dhaka Tribune, riders have accused ridesharing companies of delays in receiving their dues in case of digital payments. Payments take up to a week for Uber, but more than a month in the case of Pathao. As a result, this time lag becomes a significant concern for the riders who rely on such platforms for their livelihood. Usually these payments are transferred through banking channels. The riders who serve without an app or those who do not link a bank account with the app receive instant cash payments. On the other hand, riders who have linked their profiles to a bank account have to wait for a week to a month to get their due payments.
Driver’s Profile Rating
Generally, after completion of a ride, passengers give a rating to the rider based on the vehicle condition, driving skill, rider’s behavior, etc. When a passenger requests a ride, the rider with the highest rating among the nearby available riders receives the request. But, if he ignores the request, the call gets transferred to the rider with the second highest rating. Therefore a rider with a lower rating has to wait a long time to get a ride request. But in many cases riders are not aware of how to increase their rating or why their ratings are low. But many riders lose interest in the app and start providing services outside the app because of consistently getting less ride calls because of their lower rating.
Inconvenient Pickup Locations and Traffic Congestion
Ridesharing platforms usually send pickup requests to riders that are within 1-1.5 kilometers of the user’s pickup location. Sometimes riders from the opposite side of the road receive requests. Although the distance of a couple of kilometers is not much, in congestion prone cities like Dhaka or Chittagong, it often takes a very long time for the riders to reach the user’s pickup location. This is why riders who are waiting for passengers in busy locations like bus stands and shopping malls tend to directly pick up passengers without using any app. This saves them both fuel and time.
Pandemic Practices Sustained
During the pandemic the government halted operations of all ridesharing platforms for a long time. But the bike riders who relied on only ridesharing for their livelihood had to share rides offline for their survival. Although all modes of transportation, including ridesharing, were shut down some people still had to commute. In that scenario the riders used to provide rides without using apps. As a result of continuing this practice for a long time, it persisted even after the apps were allowed to operate again. This is one of the reasons why riders are accustomed to share rides without apps.
Other Issues
In Bangladesh, a vehicle is sometimes used by multiple riders for sharing rides, of which not all are registered on the ridesharing platforms. Therefore, such riders share rides without apps.
Apart from these reasons, the app blocks any rider who repeatedly cancels ride requests. Canceling requests frequently results in an app blocking rideshare provider for a few days, even those who share rides full time. As a result of this, these riders then start providing service without apps, as many of them depend solely on ridesharing as their income source. But in some cases if the rider is strictly warned instead of being blocked or some other action is taken, the riders would not be forced to provide service without the app.
In many cases, riders provide service both with and without the app. They choose how to share rides based on their convenience and profitability. This is how many riders try to make the maximum profit from their ridesharing efforts. However, using an app, provides some degree of safety to both rider and passenger. In addition, in case of any accident or mishap, there is opportunity to seek legal or other assistance if an app was used for that ride.
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