Drivers are ditching bike taxi apps for old-fashioned pickup trucks in Bangladesh
When Nafisa Yesmin heard about her brother’s accident one morning in early January, she opened the Pathao on-demand carpooling app on her phone. She thought a motorbike would be the quickest way to get to the hospital through the busy back streets of Gulshan, her neighborhood in Dhaka. Instead, she spent nearly half an hour refreshing the app, finding no available drivers. Feeling helpless, she started walking the five kilometers to the hospital. As she neared the end of her street, she found a group of motorcycle riders ready for the passengers. She greeted one of the drivers – a complete stranger – and drove alongside her brother in 15 minutes. “I had no choice; I had to ride a bike without any app and at my own risk,” Yesmin said. Rest of the world.
Dhaka, the capital of the eighth most populous country in the world, Bangladesh, is among the 10 most congested cities in the world, making motorcycling one of the best modes of transport to use there. With over four million motorcycles In Dhaka alone, app-based motorbike transport might have been the ideal business, experts say. In recent years, the rise of motorbike ridesharing apps in Bangladesh aimed to provide passengers with a respite from heavy traffic and an opportunity for reliable and secure on-demand transportation. But with companies requiring drivers to pay high commission rates, what was once considered a thriving industry is now struggling to sustain itself.
“When app usage increases in other countries, Bangladesh falls back. Chances are we destroyed the industry early on,” said Abu Saeed Khan, senior policy researcher at LIRNEasia, a Colombo-based think tank “It could have been a great source of revenue for local and international startups.”
Motorcycle taxis were first introduced in the country around 2016 by a host of local companies, such as Pathao, Shohoz and OBHAI, and the American company Uber. In 2018, the ride sharing industry in Bangladesh was estimated to be worth $260 million and accounted for about 23% of the country’s transport sector, according to the Policy Research Institute of Bangladesh (PRI). By 2025, the ride-sharing industry is expected to reach $400 million, says PRI Rest of the world.
Any bike owner in Bangladesh can apply for a ridesharing company by submitting their driver’s license and national ID card through their app. Companies approve riders after completing a background check with the BRTA. Drivers pay a commission – which can be up to 25% of the fare – for every booking they get through the app.
As bike sharing became popular in Bangladesh, drivers increasingly bypassed apps and connected directly with passengers. These “off-app rides” were more lucrative for drivers who wanted to avoid paying commissions to app companies. Drivers are abandoning Pathao at an ‘alarming rate’, company source says Rest of the world on condition of anonymity. The company has noticed that some drivers and passengers are turning to “offline travel,” Pathao said. Rest of the world in a statement but declined to share further details. The company said it has around 300,000 drivers on its platform.
But drivers say the situation is not easy as they simply drop the apps. “We work in rain and shine and pay up to 25% commission on our earnings, which is extremely high. We still don’t know if carpooling is a service or a job. We are still not seen as workers,” said Belal Ahmed Khan, general secretary of the Dhaka Ride-sharing Drivers Union (DRDU). Rest of the world.
Khan said the only way to keep drivers on apps is to reduce commissions to less than 10%. Last November, Pathao reduced its commission to 10% during peak hours (8 a.m. to 11 a.m. and 5 p.m. to 8 p.m.). During off-peak hours, the app still charges up to 15% commission.
Uber still charges drivers in Bangladesh up to 25% commission. “Maintaining a safe and reliable carpooling platform in Bangladesh requires significant investment. Our commission reflects the need for us to reinvest in technology and other solutions, to ensure passengers and drivers receive the highest quality service,” an Uber spokesperson said. Rest of the world.
Borhan Hossain, a driver who started offering rides via bike-sharing on Uber three years ago, stopped using the app last year as he struggled to make a profit. “If I earn 100 taka ($1.15), the fuel cost is 20 taka, and another 25 taka is for company commission. I have little money left in my account. I stopped using apps because it’s not profitable,” Hossain said. Rest of the world. “Also, thanks to the apps, I don’t get the money instantly. That’s why I decided to go for rides without apps. That way what I earn goes into my pocket.
Another Dhaka-based driver, Mamun Mia, said having passengers travel on the road saves him time, which means he can make more trips and earn more money. “There is a huge demand on the apps during office hours, but it takes a long time to get to a passenger’s location to pick them up. [up]. If I stand next to the street, I receive passengers without wasting time. It’s more cost effective than using apps. I haven’t done an app ride in the last nine months.
Customers are also happy to ditch the apps and go back to the street to save time and money. Twelve customers who use motorcycle-sharing trips said Rest of the world that they were happy to bypass the apps because they could negotiate better rates directly with the drivers. Uber’s base fare in Bangladesh is 50 taka ($0.58), and then it charges 21 taka per kilometer. Pathao charges a base fare of 25 taka and 12 taka per kilometer after that. Pathao also levies a “waiting fee” of 0.5 taka per minute if a bike is stuck in traffic.
Over the past year, at least two motorcycle taxi companies, Shohoz and Obhai, have closed in Bangladesh. In October 2021, the local multi-service startup Shohoz fired his carpool team, and Obhai close its self-service bicycle service after seeing a sharp drop in the number of users on its platform.
While circumventing apps may seem lucrative for drivers and commuters, it can be very risky, law enforcement officials said. Rest of the world. Numerous cases of theft, burglary and assault have been reported during these off-enforcement rides, a Dhaka Metropolitan Police (DMP) spokesperson said. In May 2021, the DMP issued an opinion to passengers asking them to avoid renting unauthorized vehicles and using ride-sharing apps.
In January, representatives of the industry’s two biggest players, Pathao and Uber, along with other ride-sharing companies, met with BRTA director Sarwar Alam to raise concerns about drivers contracting passengers directly. “They told us that the drivers were breaking the rules and taking passengers without using the app. We said we would monitor this, but you need to lower the commission rate,” Alam said. Rest of the world.
Companies feel that the commission they charge is fair, given the level of security they offer. According to his website, Pathao Mandates wearing a helmet and offers live location sharing, a two-way scoring system, and a rapid response team that provides support in emergency situations. Uber Moto has a 24 hour security line in Bangladesh to report misconduct by a co-passenger, an argument with a driver or a breakdown. The Uber Moto app includes a “RideCheck” feature that flags ride irregularities, like falling off mid-ride.
“We strongly discourage off-platform rides, as off-platform rides have no safety responsibility or support for passengers or drivers,” Uber said in a statement to Rest of the world. “Trips taken offline are not on GPS and therefore cannot be tracked. Riders and drivers on an offline trip do not have access to any safety features housed in the Uber app or to Uber’s Security Support Team Additionally, passengers do not have visibility into the driver’s identity (name, photo, rating, etc.) at the time of booking.
If a crime occurred on a ride that had not been booked through its app, Uber said in the same statement, a customer would not have access to basic information such as the driver’s name and photo for file a police report.
Meanwhile, drivers believe that the government of Bangladesh is not protecting their interests. Drivers must pay advance income tax (AIT), which is imposed for business purposes even when rideshare apps do not count them as full-time employees. Over the past two years, bike-sharing companies have also faced several bans by the government within the health and safety guidelines established during the Covid-19 pandemic.
At the end of last September, more than 1,000 drivers across Bangladesh continued a 24 hour strike to demand that commissions be reduced to 10%, the recognition of drivers as full-time workers and protection against police harassment on the road. In Dhaka, drivers formed a human chain on the side of a road in protest.
“For the past five years, the government has been unable to come up with laws for app-based carpooling. As a result, we are harassed and deprived of our legitimate wages,” said DRDU’s Khan. For the ridesharing industry to survive, government officials, law enforcement, app companies and drivers must come together to find a solution that works for all stakeholders, said Dr Md. Shamsul Hoque, a leading transport expert and professor at the Department of Civil Engineering, Bangladesh University of Engineering and Technology, said Rest of the world. “There is no alternative to using apps to keep drivers and customers safe. If this problem is solved, Bangladesh can be a world leader in this sector,” he said. declared.