Catching an Uber

AURORA: When did Uber start operations in Pakistan?
ZOHAIR YOUSAFI: We have been live in Pakistan upwards of seven months. We first launched in Lahore in March and had an amazing response. One of the things that really resonated was the fact that we are an international brand. And then we launched in Karachi in August.

A: Why did you choose Lahore to launch?
ZY: Firstly, if one looks at the ecommerce patterns in Pakistan, Lahore accounts for roughly 22% of the entire country’s ecommerce transactions. Secondly, in terms of the infrastructure and security situation, Lahore was the better choice. Thirdly, we had positive interactions with the government and before we launched, we signed an MoU with the Punjab IT Board. After the amazing response we received in Lahore, we followed suit six months later in Karachi and again the response was phenomenal. We signed an MoU with the Sindh Government. There was a lot of awareness and readiness to bring Uber in and change the way people move around in their cities.

A: Why is government support important to Uber?
ZY: Government support is always welcome. Wherever we operate in the world, we want to work with lawmakers and governments to make sure that our visions are aligned. If you look at Uber with respect to the scale and the potential it has in terms of economic opportunities, job creation and offering affordable and reliable transportation to the public, you see that these initiatives are in line with what governments want to push and I think they recognise our ability to help in those areas.

A: When did Pakistan emerge as an opportunity on the Uber radar?
ZY: Pakistan is the sixth most populous country in the world and 75% of the population is under 35 years of age; two of the 12 mega cities in this region are located in Pakistan, so there is an opportunity in the scale the business could ultimately attain. Then there was the launch of 3G and 4G in Pakistan and the fact that smartphone penetration is expected to reach 40 million by the end of this year – and added to this the security situation is improving. All these factors contributed to the decision that this was the right time to launch in Pakistan.

A: How does the Uber platform work in Pakistan?
ZY: The same way it does anywhere else in the world. We don’t own vehicles or employ drivers. Uber is a technology platform people sign up to; riders looking for transport services and partners who provide those services. A partner can be an individual who owns a car or rental companies that want to put their cars on the platform with their drivers.

"An Uber partner can be an individual who owns a car or rental companies that want to put their cars on the platform with their drivers."

A: What is the typical profile of an Uber partner?
ZY: When we launched Uber in Pakistan we weren’t sure. We had preconceived notions about who would sign up. The beauty of the technology is that it is accessible to anyone. We have students, teachers, people in full time jobs; in the day they are software engineers or IT managers and in the evening they get into their cars, log on to the app and start driving on the Uber platform. There are people in between work who use the platform until they find a job they want. It is extremely validating that people are willing to use Uber as a lead generation platform and as a way of earning additional income. The accessibility and the fact that they can be their own boss have attracted people from all walks of life and from different areas of both cities. In Lahore we have partners residing in Defence, Cantt, Wapda Town, and Mughalpura signing up. In Karachi we have partners from Clifton and DHA as well as Nazimabad.

A: Do you screen your partners before allowing them to use the platform?
ZY: We have a very rigorous screening process. We do a NADRA biometric verification for every partner who signs up as well as criminal background checks; we look at terrorist databases as well. Beyond this, we have partnered with a Lahore-based NGO called Rabtt to help us develop an anti-sexual harassment model to train our partners. Every partner goes through this module in order to understand how to interact with riders, especially women. We also provide app training to familiarise them with the technology and the service. It is a very validating experience to see people learning and growing by using Uber as a means to support their families, which is the ultimate goal there.

"We have a very rigorous screening process. We do a NADRA biometric verification for every partner who signs up as well as criminal background checks; we look at terrorist databases as well."

A: What kind of cars do they use?
ZY: We have launched Uber Go in Pakistan, which is our low cost product and makes our prices very competitive; in Lahore and Karachi they are just a little bit above a rickshaw fare. The cars are 600cc and are either imported Japanese models or Suzuki Mehrans, although there are people who drive Toyota Corollas. It is a low-cost model and this helps keep the efficiencies high and the costs low for customers.

A: Are there any basic requirements they have to meet in terms of the condition of the car?
ZY: Firstly, we don’t accept any vehicles that are over 10 years old. Secondly, we have a system that allows customers to rate the driver and the experience. Over time we aggregate these ratings and look at partners who are consistently receiving lower ratings, either because their car is badly maintained or their attitude is poor and we take action accordingly; eventually we would either suspend or remove them from the platform. At the same time, our partners rate their customers as well in terms of their attitude; did they make the partner wait an excessive amount of time? Were they polite or not? It is important to keep a balance between our partners and our customers, because a lot of partners use the platform as a source of additional income to support their families. So it is important that our customers are respectful to our partners that they too have a safe and pleasurable experience and that customers don’t get into the car and start harassing them. Both partners and riders have to be satisfied in order for this platform to work and be efficient.

A: What about liability in case of an accident?
ZY: Uber is a technology company and our role is to provide reliable transportation through our app and technology. When a partner uses our platform to source business, it is his liability to provide a safe and secure ride. There is a legal requirement in Pakistan to have a third-party liability.

A: Yet, the reality is that very few drivers have third-party insurance.
ZY: That is a government enforcement issue. Having said this, as a responsible aggregator we continue to have discussions with our partners to raise their awareness about the importance of insurance and that it is a legal requirement of the Government. We do this in Lahore, Karachi and all over the world – we are in continued discussions with insurance companies, we connect them with our partners and tell them that it is important that they provide a package our partners can afford.

"When a partner uses our platform to source business, it is his liability to provide a safe and secure ride. There is a legal requirement in Pakistan to have a third-party liability."

A: Do you have any female partners?
ZY: Not at the moment; but we strongly encourage women to drive on the platform. They would need to overcome a lot of cultural sensitivities; but we would be excited about having that first partner on to the roads and seeing how she likes it.

A: What is your typical customer profile?
ZY: Uber is very competitively priced and if you look at Lahore and Karachi, I would literally say just right above a rickshaw and at night we are even cheaper than rickshaws, which often increase their fares.

A: Why did you take that decision to price it so low?
ZY: Our goal is to provide people who use public transport with a product that is affordable, reliable and safe. We are targeting all walks of life and encouraging them to use the technology to reach efficiencies and volumes which make economic sense for our partners and our riders; people who would find it more convenient to take an Uber rather than hire a rickshaw or go through the bother of driving their car in traffic.

A: What other products do you have apart from Uber Go?
ZY: UberX, UberBLACK and UberSelect are premium products aimed at different target segments.

A: These products are not accessible in Pakistan?
ZY: Not at the moment.

A: Does Uber plan to provide their service in other Pakistani cities?
ZY: Given the positive response in Lahore and Karachi, it makes sense to expand. Last year we invested $250 million in the MENAP (Middle East, North Africa and Pakistan) region and a large portion of this has been earmarked for Pakistan. We consider Islamabad the remaining tier-one city. There are a lot of interesting tier-two cities; in Sindh – Hyderabad, Sukkur, Mirpur Khas; and in Punjab – Faisalabad, Gujranwala and Multan. So definitely there are plans to expand the service.

A: Is Uber considering bringing in other Uber products in the foreseeable future?
ZY: We are looking at the potential of targeting different segments of the market. One has to consider the economics that will work. Karachi, for example, opens up the possibility of doing an UberBoats in the future, which is what we did in Dubai and in Turkey. We have UberEATS and given the foodie culture in Lahore and Karachi, the idea would be to use the same network of partners and provide them with an additional earning opportunity, while giving customers the chance to order their favourite meal.

A: Has Uber faced any resistance from local taxi drivers?
ZY: They see it as an opportunity as well and several have signed up on the platform to drive in their downtime.

A: Careem has already made inroads in Karachi at least. Is the market big enough for two or even more players?
ZY: Competition is healthy all around; it keeps us on our toes and the customer ends up getting a better product at a better price. Karachi has a population of 24 million and Lahore of almost 15 million; so it is a massive market and a huge business opportunity for both and other players. As people start to adopt this mode of transport, you end up creating a larger customer base as you go along, especially through word of mouth – and that is how you start hitting those volumes.

A: How do you promote your service?
ZY: We have tried a mix of different things; anything that will get the message. In Lahore we did a lot of digital marketing on Facebook, Google and Google Play; however the highest conversion has come through word of mouth. In September, we introduced a 30% price cut in Lahore and we announced it with a massive campaign; 40 billboards around the city plus print and radio spots. The campaign created a lot of awareness.

A: What about Karachi?
ZY: In Karachi we had tremendous organic demand. In fact, Karachi has seen the fastest growth at launch in the history of Uber in the Europe, Middle East and Africa region. So, at this stage marketing isn’t needed. The challenge is getting more partners on the road, because the demand is absolutely amazing.

A: How do you market to prospective partners?
ZY: We do a lot of outreach; we go to universities or to communities where people are looking for jobs. We encourage them to sign up and come to our ‘green light hubs’, where we take them through the sign up process, install the app and provide training. Then it is up to them whether to go ahead or not. When they do and their first payment is transferred to their account (we pay weekly), they realise the potential Uber is giving them. Here too, word of mouth plays a big role and we encourage referrals to families and friends by offering them bonuses. A partner can bring another individual to the green light hub and if they sign up, go through the process and complete a certain amount of trips, they receive a referral bonus of Rs 5,000, so if they refer 10 people, that is Rs 50,000 extra they earn just from referrals.

"Our partners keep 75% of what they earn and we take 25% as a service fee to source business from our lead generation platform."

A: What is the payment model for customers?
ZY: Pakistan was the first market we launched with cash because of the low penetration of credit and debit cards. However, people can also pay through their credit or debit cards.

A: How does the payment model work for your partners?
ZY: Our partners keep 75% of what they earn and we take 25% as a service fee to source business from our lead generation platform.

A: What prompted the 30% cut in Lahore?
ZY: We wanted to increase the earnings of our partners and reduce their wait time between trips by getting more customers on the platform.

A: Are the prices the same in Lahore and Karachi?
ZY: They are different. In Karachi we operate on a Rs 100 base fare for Rs 9.38 per kilometre and two rupees per minute. In Lahore, the base fare is also Rs 100, but for Rs 6.84 per kilometre and Rs 3.15 per minute.

A: Why the differential?
ZY: You look at the traffic patterns and congestion in each city and you price accordingly, because you have to be relevant to the city you are in.

Zohair Yousafi was in conversation with Mariam Ali Baig. For feedback email aurora@dawn.com