Ride-sharing platforms that transformed the means of commute in Dhaka over time, are now on a rough ride as all their services have remained suspended since March 26 to curb the spread of coronavirus in the capital.
The ban on ride-sharing platforms was part of the government’s directive for a suspension of all forms of public transport across Bangladesh to contain the Covid-19 pandemic and to ensure social distancing and isolation.
It is not only the ride-sharing companies but also thousands of riders who registered on the platform to earn some money who have been badly hit by what is conceivably a long term suspension of vehicles on the road.
According to ride-sharing operators, it will take at least six months for them to recover the loss caused by the pandemic.
Data compiled by the Bangladesh Road Transport Authority (BRTA) show that the number of motorcycle registration has doubled over the last nine years in the capital.
The number has surged significantly since 2017 when ride-sharing services, including Uber, Pathao, Shohoz and Obhai were introduced.
With this shutdown, all riders who earned their livelihood by ride-sharing, delivering parcels and courier services through apps have been forced to stay at home.
Maliha M Quadir, founder of Shohoz, told Dhaka Tribune that about 70% of the riders came from different districts in the country and used to earn a minimum of Tk20,000 per month through ride sharing.
“Now, their livelihood as well as the whole sector has collapsed. Some riders are delivering parcels on bicycles but this number is very low,” she said.
It will be difficult for these riders to survive the pandemic, she added.
On April 13, Prime Minister Sheikh Hasina rolled out a Tk760 crore scheme for people who have been hit the hardest by the countrywide shutdown, including transport workers.
Unfortunately, ride-sharing services were overlooked in the stimulus package.
According to Uber, the largest ride sharing platform in the country, 22% of people in Dhaka have used the Uber app at least once.
About 100,000 car drivers have partnered up with Uber, while every week 2,000 motorcycles sign up. The app used to be opened 155 times per minute in Dhaka.
Thousands became unemployed
Md Aziz Hossain has been working as a rider of Pathao to maintain his family since arriving in Dhaka from Madaripur in 2018.
Now, managing livelihood for a family of four has become difficult for him.
“I used to work as a rider from 9am to 9pm every day and my minimum earnings ranged from Tk1200 to Tk2000 daily, and monthly income used to be between Tk30,000 and Tk40,000. Now, buying food for the family seems like a luxury,” he said.
Aziz told his family that he worked for an insurance company, concealing his real profession.
“My children are in school in Dhaka, but their fees are yet to be deposited. I will surely overcome the crisis once the pandemic is over as the income was good, but for now I can neither leave Dhaka nor manage the money to live here,” he said.
Ride-sharing platforms facing big loss
The ride-sharing platform Shohoz had 3.5 lakh registered drivers and over half a million users.
Riders have to pay 20-25% of their earnings to Shohoz, which is one of the main sources of revenue for the company.
Shohoz, like other ride-sharing platforms, also has to offer discounts to attract users. These discounts are offered from the revenues earned from riders.
Shohoz began its journey as an online ticketing service in 2014 and launched its ride sharing service in 2018.
“It takes years for a start-up to generate profits. Due to the Covid-19 pandemic, we are counting twice as much loss every day. Although we are still paying salaries to 350 permanent employees every month, we cannot see how the business can be run in the next few months, said Maliha, the founder of Shohoz.
Like other ride-sharing companies, Shohoz has temporarily suspended ride sharing operations as per government directive.
Pathao, another ride-sharing platform, has over 3,00,000 drivers, food delivery men, and courier agents along with over 25,000 e-commerce merchants, and over 5,000 restaurants enlisted.
Sayeda Nabila Mahabub, head of marketing and public relations of Pathao, said most of the riders come from different corners of the country to earn a living and support their families.
“Now, like so many others, they are staying home and struggling to make ends meet,” she said.
Start-ups in Bangladesh have provided income opportunities to thousands of unemployed and underemployed youth, she added.
“When the coronavirus crisis is over, the following six months will be challenging. It will be very difficult to recover from the loss without the government’s supervision,” she said.
Syed Fakruuddin Millath, corporate & regulatory affairs of Obhai Solution Ltd, said the firm was concerned about the well-being of around 85,000 drivers and 1,400,000 customers, in addition to its business loss.
Pathao seeks govt support
Pathao has proposed a specially designed assistance and relief program for start-up ride-sharing services that will comprise the following components:
The government can fund a concessionary loan program with the loan amount based on the last six months’ payroll, a tenure of five years with balloon repayments, and interest rate of 1%;
For low income earners, a grant fund can be disbursed through and accounted for by the start-ups;
A full exemption of VAT and withholding taxes on revenue and expenses of start-ups for the current and next fiscal year may be considered in light of the crisis.
