Can Careem crack the super

Who would have thought that it would be ride hailing, of all services, that would get Pakistanis used to the idea of spending money over the internet Entrepreneurs and companies have been trying their hand at e commerce in Pakistan for at least a decade iphone 6 cover look like iphone 7 now, but it took the custodia iphone 8 wireless arrival of ride hailing giant Careem in Pakistan to get people used to the idea of paying for services or iphone 7 plus cover for rose gold goods that they bought over the internet.

So, if you are Careem, and you have just achieved what was in the Pakistani imagination considered almost impossible, it would be downright irresponsible not to take it one step further and try to custodia iphone 7 anti radiazioni grow and capture as much of the e commerce market in the country as possible. That seems to be the idea behind Careem’s launch of its super app something that Careem founder Mudassir Sheikha has been talking about publicly since at least early 2019 which launches for the Pakistani market on Monday, June 15.

Here is how it works: Careem has already created the infrastructure cover nera iphone that allows people to use its ride hailing services and pay for them through the app, either through payment information stored in the app such as a debit or credit card or through credit that they have added into their Careem wallets by paying cash to the drivers (known as “captains” in Careem parlance). Why not use that infrastructure both the app and the payment mechanism to get people to pay for other goods and services that they may currently be buying through other apps

“Super App by Careem will be like a virtual mall, where there will be two models services owned and offered by Careem itself (ride hailing, food, same day delivery capped at Rs5,000, and payment from CareemPay), and other third attack on titan cover samsung parties on board offering any sort of services that need communication of the vendor to the customer base,” said Zeeshan Baig, CEO of Careem Pakistan, in an interview with Profit.

“The third party vendors [marketplace] will begin to unroll towards the end of the current year cover iphone 7 fantasia or early next year,” he added.

The move towards building a super app is the latest evolution in a business that has cover iphone 6 givenchy had to undertake a gargantuan effort in getting its target markets used to the concept of its services and building a sustainable business. In this story, we take a look at how Careem has evolved in Pakistan, and how the super app is likely to build on the features the company has been able to add onto its platform in the four years that it has been in operation in the country.

For this story, Profit was given exclusive access to Careem’s internal data, which provides a never before seen look at how this business has changed from when it opened its doors in Pakistan in 2016.

Building a market out of thin air

Careem started off in 2012 as an app that simply provided access to existing cab and limousine services, initially in Dubai and then in other cities around the Gulf Arab region. It always had the ambition to lego become the region’s answer to Uber (which ultimately bought the company in early 2019 for $3.1 billion). But it was operating in a region that was very different from the United States, the home market for Uber.

Uber had started off in 2009 in the middle of the biggest recession in nearly 80 years in the United States. custodia cover samsung s7 edge It was a cover iphone 4s lupo unique moment in a unique country. The US at the time had three key ingredients that allowed Uber to succeed:

A large workforce that was out of work at the time and actively looking for sources of income

That population owned, or otherwise had access to, cars

They, and the wider US population, had access to both smartphones and 3G/4G mobile broadband internet connections.

Of those conditions, the United Arab samsung a70 hoesje Emirates market had two of the three: plenty of people in the UAE are there for all sorts of employment, and by 2012, smartphones and mobile 3G connections were widespread in the region. What it did not have at least at the start was the second factor: in the UAE back then, there was a disconnect between the people who cover iphone 4s sotto acqua owned the cars, and the people who would be willing to drive them around for an income.

Careem bridged that initial gap by partnering with existing rental car and limousine services, and extensively marketing its services to customers, proving its ability to connect cars with riders. Once it was able to demonstrate that it could do that and do so profitably for the drivers and car owners it then branched out to allowing owner drivers to offer services on its platform as well, which was the initial plan all along.

Something similar happened in Careem’s evolution in Pakistan. The company waited to launch in Pakistan cover samsung core prime silicone until 2016, around the cover iphone 5s stitch same year that 3G and 4G connections started becoming widely available in the country. And when it cover samsung galaxy s4 trasparente did so, it partnered with car rental companies or with small business owners who would be willing to own multiple cars and hire salaried or fare sharing drivers to iphone 8 extreme cover operate them on the platform.

In 2016, according to the company’s internal data, about 84% of the cars on its platform were driven by drivers who were salaried employees of a car rental company or other small business that had signed onto Careem. Only 16% were people who owned their own cars. This model got the company off the cover samsung galaxi s 3 neo ground, but it had its limits.

“When we started operating here, the easiest thing for us was to go to rental companies and offer them our platform,” said Baig. “They already had the fleets, drivers and everything. But that model means a lot of shares to lots of parties. The margins are already low in this type of work and that model further diluted it.”

Needless to say, Careem wanted to move to a business model more similar to that of Uber in its mature markets, and that meant spending intensely in order to grow, offering artificially low fares to customers and bonuses and all sorts of other cash incentives to drivers.

“As with any startup and anywhere in the world, in the initial days there is the ‘buying growth’ phase,” said Baig.

And Careem was aggressive in its effort to buy that growth. Between 2016 and 2018, average fares per ride for its ride cover alluminio iphone 7 hailing business went down by 35.7%, from Rs364 per ride on average, to just custodia cover huawei mate 10 lite Rs234 per ride. And this was not driven by people using the app for shorter rides: while the average distance traveled did decline somewhat from 10.7 kilometres in 2016 to 9.5 kilometres in 2018 the bulk of the difference came from a 27.6% reduction in average fare per kilometre, which went down from Rs34 per kilometre in 2016 to Rs24.6 in 2018.

Drivers during this time, meanwhile, kept getting higher compensation to continue driving on the platform so that there would always be enough cars for people whenever they needed to hail a ride. In other words, Careem did not care if it made money on each ride. It cared about the total number of rides, the number of customers, and the number of drivers using its platform, and it was willing to spend the money to get them.

That growth strategy termed ‘blitzscaling’ by LinkedIn founder Reid Hoffman (blitz is German for lightning) does not come cheap. In the first four years iphone xr hoesje of the company’s operations in Pakistan, Careem has invested $85 million in this market, the bulk of which has gone towards that blitzscaling strategy of ‘buying growth’.

It did work, however. By the end of 2019, Careem was the largest e commerce business in Pakistan, by a wide margin. During a year when Daraz was doing close to $50 million in annual revenue, Careem was handling closer to $250 million in annual bookings, according to sources familiar with the matter.

(The company’s management did not confirm these numbers. While they shared many data points about their operations, they were not willing to discuss revenue or profitability numbers.)

More importantly from the company’s perspective, the growth came as a result of more independent drivers signing onto the platform. By 2018, well over half of the drivers on the platform 62% to be precise were independent drivers who owned or leased their cars. That number has since grown even higher to 86% as of early 2020.

“It makes more economic sense to have independent vendors with their own cars to work with us,” said Baig. “From the quality point of view as well, a salaried driver has less opportunity cost when it comes to being efficient and following rules.”

Having more independent drivers also lowers Careem’s own operating costs in Pakistan. “We used to manage vendors very strictly when we had more salaried drivers, but with independent vendors with their own cars and own investment, they are more motivated as well. So, this model also means better cars, better services, and obviously makes more economic sense,” said Baig.

The platform now has 150,000 monthly active drivers across Pakistan, according to Careem’s management, out of 700,000 registered drivers, a number the company hopes to grow aggressively…