Uber vs Careem

1
(No Transcript)
2
Need to Book a Cab
Click Here
3
Introduction

• It is safe to say that Uber has revolutionized
  taxi service since its inception in 2009.
• It is one of the most commonly known apps in the
  world today and has been tremendously successful
  despite many regulatory issues across the world
• Uber entered the Pakistani market in March 2016,
  launching in Lahore and later expanding to
  Karachi.
• Careem, its main competitor in the region was
  established in Dubai in 2012 and now operates in
  6 cities, Lahore, Karachi, Islamabad, Hyderabad,
  Peshawar and Faisalab
• Careem does not have nearly the same amount of
  financial muscle as Uber but has been putting up
  stern competition in the MENA region.

2017 KarloCompare
4
The Consumer Perspective

• As a consumer, theres very little to choose from
  between the two service providers.
• The price point is competitive for both
  companies, although Uber holds the edge as their
  rates can be up around 10 to 20 cheaper than
  Careem.
• The two competitors are constantly slashing rates
  and introducing discounts so prices are
  continuously varying.
• From personal experience though, Uber tends to
  have surge pricing more often than Careem.
• Surge pricing is when the cost of your trip is
  multiplied by a factor from anywhere between x1.2
  to x2 or even x3 depending on the demand and
  availability of cars in your area and the traffic
  on the roads.

2017 KarloCompare
5
The Consumer Perspective

• Most cars that I have sat in, the drivers have
  signed up for both Uber and Careem and use them
  simultaneously so, once again, there isnt much
  to choose from between the two.
• The key advantage that Careem holds over Uber is
  that it has a local helpline that is available
  24/7.
• This has been particularly useful to me in a few
  situations where I have had to cancel rides due
  to reasons beyond my control.
• If you cancel a ride 2 minutes after the rider
  has accepted it, you are charged Rs. 150 as a
  penalty.
• Once, a rider had gotten into an accident on the
  way to my pick up location and I had to cancel
  the ride.
• I called their contact center and they were able
  to assign a new driver without any charges.

2017 KarloCompare
6
The Consumer Perspective

• Most cars that I have sat in, the drivers have
  signed up for both Uber and Careem and use them
  simultaneously so, once again, there isnt much
  to choose from between the two
• The key advantage that Careem holds over Uber is
  that it has a local helpline that is available
  24/7.
• This has been particularly useful to me in a few
  situations where I have had to cancel rides due
  to reasons beyond my control.
• If you cancel a ride 2 minutes after the rider
  has accepted it, you are charged Rs. 150 as a
  penalty.
• Once, a rider had gotten into an accident on the
  way to my pick up location and I had to cancel
  the ride.
• I called their contact center and they were able
  to assign a new driver without any charges.

2017 KarloCompare
7
The Consumer Perspective

• Careem also provides you with the option of
  paying extra for a ride and having the balance
  added to your Careem wallet to be used for future
  rides.
• For example, if your ride costed Rs. 150 and you
  pay Rs. 200, the balance of Rs. 50 will be added
  to your wallet which will be deducted against
  your next ride.
• You get an SMS confirmation of this payment
  immediately in case there are any discrepancies
  in the future.
• This option is particularly helpful if you or the
  driver does not have exact change to give you
  back.
• Unfortunately, Uber has not introduced this
  option yet. In most parts of the world, Uber does
  not even allow you to pay for rides with cash
  only debit/credit cards.

2017 KarloCompare
8
The Consumer Perspective

• Both companies offer various discounts and deals
  every now and again which they notify you through
  their app or via SMS.
• They are quite competitive but in my experience,
  I have received more offers from Careem over the
  last 9 months or so.
• Personally, I prefer Careem mainly because I
  like supporting the underdog.
• It also helps that it was co-founded by a
  Pakistani.

2017 KarloCompare
9
The Drivers Perspective

• Both companies offer various discounts and deals
  every now and again which they notify you through
  their app or via SMS.
• They are quite competitive but in my experience,
  I have received more offers from Careem over the
  last 9 months or so.
• Personally, I prefer Careem mainly because I
  like supporting the underdog. It also helps that
  it was co-founded by a Pakistani. But thats just
  my opinion.
• The signing up process for both companies is very
  similar. You must submit your identification
  documents, car registration along with a
  character certificate verified from the police as
  part of your application.
• Your car must meet their requirements

2017 KarloCompare
10
The Drivers Perspective

• One key difference that drivers speak about is
  that Uber has a more sophisticated training
  procedure that riders must go through before they
  hit the roads.
• Potential drivers must go through various
  trainings around customer service, sexual
  harassment and professionalism.
• Careem also trains its drivers but it seems more
  casual. I have not gone through the process
  myself, this is a conclusion based on
  conversations with a decent sample size of
  drivers from both companies.
• So, youve signed up. What now? Well, youre
  given your mobile device and can take rides
  straight away!
• Careem charges the drivers a commission of 20 of
  all rides, whereas Uber charges 25.

2017 KarloCompare
11
The Drivers Perspective

• You might think this automatically gives the edge
  to Careem, but many drivers have said Uber is
  more popular with customers.
• It could be because many people who have
  travelled to places such as the US and Europe
  might already have the app installed on their
  smartphone when Uber launched in Pakistan I
  know this was exactly why I used Uber before
  Careem.
• So, the volume might justify the 5 extra you pay
  in commission
• Just as they are offered to customers, both
  companies also offer various bonuses to its
  drivers on a regular basis.
• They regularly set a target number of rides to be
  completed on a certain day or few days and offer
  bonuses in the range of Rs. 1,000 to Rs. 3,000.
  Drivers tell me that Uber tends to offer bonuses
  more regularly to its drivers than Careem.

2017 KarloCompare
12
The Drivers Perspective

• You might think this automatically gives the edge
  to Careem, but many drivers have said Uber is
  more popular with customers.
• It could be because many people who have
  travelled to places such as the US and Europe
  might already have the app installed on their
  smartphone when Uber launched in Pakistan I
  know this was exactly why I used Uber before
  Careem.
• So, the volume might justify the 5 extra you pay
  in commissions.
• Just as they are offered to customers, both
  companies also offer various bonuses to its
  drivers on a regular basis.
• They regularly set a target number of rides to be
  completed on a certain day or few days and offer
  bonuses in the range of Rs. 1,000 to Rs. 3,000.
  Drivers tell me that Uber tends to offer bonuses
  more regularly to its drivers than Careem.

2017 KarloCompare
13
The Drivers Perspective

• When both companies launched in Pakistan, they
  incentivized drivers a great deal, but it has
  reduced in recent months.
• For example, Uber was offering its drivers a
  minimum guaranteed amount just for being active
  and on the roads for 8 hours in a day, rides or
  no rides.
• This minimum guaranteed amount increased to
  around Rs. 3,000 if 10 rides had been taken
  during a day, even if your total revenue was
  below that.
• Careem was also offering guarantees up to Rs.
  3,500 per day if certain timing and minimum ride
  conditions were met.
• There were reports of drivers earning over Rs.
  100,000 when these guarantees were in place.
• This was a strategic move by both companies to
  grow their fleet of cars, and as of now, there
  are no more guarantees.

2017 KarloCompare
14
The Drivers Perspective

• The driver has the freedom to decide how many
  hours he or she plans to be active per day and
  there is no minimum requirement.
• That being said, my research tells me that it is
  still possible to make anywhere around Rs. 80
  90,000 in revenue every month.
• Thats assuming a Rs. 300 average ride and making
  10 rides every day without a day off.
• Taking out the companys commission, as part of
  Uber you would receive Rs. 67,500 and with Careem
  would receive Rs. 72,000.
• If you drive around this much, you would end up
  spending at least Rs. 30,000 on fuel, depending
  on which car you have.
• You can add another Rs. 10,000 or so for running
  repairs and maintenance of the car, which is
  variable depending on how you drive and what the
  present state of the car is in.

2017 KarloCompare
15
The Drivers Perspective

• I am not claiming this to be a very accurate
  calculation but rather a rough approximation,
  under which you could potentially net around Rs.
  30,000 in profit if you drive full time, i.e. 8
  to 10 hours a day.
• It is difficult to put a number on the regular
  bonuses being handed out by both companies but I
  am told that they can be significant.
• Most drivers that I have interviewed as part of
  this research say that they are able to make
  around Rs. 50,000 in profit every month by
  driving full time.
• It all obviously depends on how many rides you
  are able to take the above estimate is quite
  conservative.
• Uber settles its accounts with drivers on a
  weekly basis whereas Careem does so every two
  weeks. The account is reviewed and you must pay
  whatever you owe in commissions unless you have
  had more credit card rides or your bonuses are
  more than the commissions, in which case the
  company will pay you the balance.

2017 KarloCompare
16
The Drivers Perspective

• Both companies operate a 5-star rating system for
  their driver
• At the end of each ride, the customer must give
  the driver a rating and future customers can see
  your rating when you accept their request.
• Both companies require certain rating criteria to
  be met which is a minimum of 4.5
• If your rating falls below that, your account may
  be deactivated or you may have to meet with the
  companys representatives to discuss the matter.
• Uber calculates your average rating from the last
  500 rides, and Careem does so on a monthly basis
• There is also something called your acceptance
  rate which is the number of rides you accepted
  out of the total you had been requested.

2017 KarloCompare
17
The Drivers Perspective

• Careem allows you to only decline 2 requests per
  day, and if you decline any more you are charged
  a penalty or may be deactivated.
• For Uber, the minimum acceptance rate is 95,
  which means you are only allowed to decline 5
  requests in every 100 or face the possibility of
  deactivation
• Money matters aside, there is also a difference
  in how each company treats its drivers.
• Neither Uber nor Careem actually employ the
  drivers they are simply freelancers. Careem
  refers to its drivers as Captains, while Uber
  calls its drivers Partners
• Both companies strive to be more inclusive and
  make their drivers feel more appreciated. 

2017 KarloCompare
18
The Drivers Perspective

• Unfortunately, the drivers that I interviewed did
  not speak positively on the support being
  provided to them by either company.
• For example, during the recent issues with the
  Government, riders were not provided with any
  compensation if their cars or licenses were
  seized by Government officials.
• They were simply told to carry on and that both
  Uber and Careem are working with the Government
  to come to an agreement.
• On the other hand, I personally experienced a
  similar situation in Dubai 2 years ago, when the
  UAE Government also outlawed Uber and Careem.
  Traffic police were handing out fines as large as
  AED 5,000 (Rs. 150,000) to riders who were using
  Careem or Uber.
• I witnessed such a fine while sitting in the back
  seat.

2017 KarloCompare
19
The Drivers Perspective

• I would be distraught at being fined that amount,
  but the driver was calm, because the drivers were
  given instructions by the two companies to simply
  take the fine without argument and that the
  company would provide them with a refund.
• Seems like both companies were not ready to take
  similar fines in Pakista
• The bottom line is, theres very little to choose
  from between the two competitors from a customer
  or driver perspective
• This is supported by the fact that most riders
  have actually signed up to both companies, and
  most people using these facilities have both apps
  on their phones and do not have much of a
  preference.
• One thing is for certain, these companies have
  proved that the sharing economy is the way
  forward and this model can and will be used in
  different industries in the years to come.

2017 KarloCompare
20
Thank You
Sumair Farooqui Co-founder CEO
Ali Ladhubhai Co-founder COO
Mobile [phone] Email
sumair.farooqui_at_karlocompare.com
Mobile [phone] Email
ali.ladhubhai_at_karlocompare.com.pk