Enter The Bus Busters

As cities the world over become more crowded, the demand for faster and cheaper mass-transport services is rising, especially in developing countries like Pakistan. To tap into this opportunity, Airlift Technologies – a Lahore based company – recently launched Airlift, an app based shuttle service.

Covering Karachi and Lahore (with plans to expand further), the service allows commuters to book seats in a shuttle, in advance, through a mobile app. According to Zohaib Ali, Founding Member, Airlift, the service emerged as a solution to a major problem commuters in Pakistan and other developing countries endure on a daily basis: finding affordable, reliable and convenient transportation.

“Commuters in Pakistan are caught between two extremes: expensive on-demand ride-hailing services and shabby, unreliable and inconvenient public transport (with supply-side that operates at low efficiency levels). Airlift offers an alternative that is convenient, reliable and cost competitive.”

Although the service was off to a slow start, it gained traction after raising funding worth $2.1 million from several angel investors in Pakistan, Singapore and the US, and more recently, secured $12 million from Fatima Gobi Ventures at 021 Disrupt 2019. Thanks to this boost, Airlift has been able to go from a few rides every week to tens of thousands a month, serving thousands of commuters on a network of dozens of routes.

According to Ahmed Ayub, Co-founder, Airlift, “the initial funding of $50,000 was made by our Co-founder and CEO, Usman Gul, who conceived the idea of Airlift. We began with a small set-up, but we now have several international and local players interested in investing.”

Despite bagging major funding and with prospects of attracting more, Airlift does not plan to become a transportation company by buying their own vehicles (it is focused only on providing tech-based solutions). The company source their vans and buses by partnering with chartered bus operators who integrate themselves in the Airlift app and access passengers. However, Airlift is involved in the operations, including vehicle selection, driver training, route planning, user experience and pricing. “Exceptional user experience and pricing is our strength and sets us apart from other transportation options,” says Ayub. According to Airlift, the service is up to 60% cheaper than private transportation options such as rickshaws and taxis and on-demand car ride-hailing services. The company is operating on a demand-based pricing mechanism and according to Ali, “there are routes where the demand is high and there are not enough vehicles so the prices there might be high compared to areas where demand is low.”

A demand-based model is also used for planning the routes. The ‘Suggest a Route’, feature in the app allows users to suggest routes that they would like Airlift to service and this helps the company identify areas where there is a strong demand.

According to Airlift, the service is up to 60% cheaper than private transportation options such as rickshaws and taxis and on-demand car ride-hailing services.

The shared mobility aspect may also help reduce traffic congestion by reducing the need for using personal vehicles, lower the carbon footprint and shrink travel times, because unlike regular public transport buses that have numerous fixed stops, the app scans for commuters wanting to travel in the same direction and this means the shuttle will not have to make unnecessary stops, thereby reaching destinations faster. The company experienced good traction in the initial phase largely thanks to middle-class tech-savvy commuters who were not previously using public transport, but opted to try the service as it offers a reliable commute in a 13-seater Hiace or a 21-seater bus. However, the much larger pool of potential commuters who use public transportation are not sufficiently tech-adaptable to make the shift towards an app-based service yet. Furthermore, in order to develop a middle ground between ride-hailing and public transport systems, Airlift will have to convince commuters to make a behavioural shift from going to a bus stop to booking a seat in advance through an app. Another hurdle is the fact that the app does not support older android phones, which are used by commuters in the low-income segment.

Nevertheless, Airlift are confident the service has tremendous potential as according to a UN report on major trends in urbanisation, by 2030 about 60% of the world’s population will be living in cities, creating a previously unknown demand for transportation services and a $5.4 trillion economic opportunity.

Another major player, a Cairo-based company, Swvl, has also launched operations in Pakistan and may well give strong competition to Airlift. However, in Ayub’s opinion, “the number of potential customers is huge. Karachi’s population stands at 20 million and roughly 14% use mass transport. This gives us a potential of roughly 17 million in one city alone. So competition is not even a topic of discussion. The issue is not how many people need public transport or will adapt to app-based systems, it is how many vehicles can we provide. The numbers are outrageously in favour of Airlift and any other mass transit system. The market is so big that there is place for two, or even big, players.”

This positive outlook is reflected in Airlift’s approach to marketing. “Most of our marketing is done in-house and we are keeping it to a minimum. We are doing specific, targeted marketing aimed at people who want to use this service. If you travel through the city, you will see our branding on bus stops, while the greater focus is on digital,” says Ali.

The fact that Uber and Careem too are experimenting with similar services in other developing countries, is cause for much optimism at Airlift.