Is Pathao more successful in Nepal than in Bangladesh?
The Bangladeshi ride-sharing platform has expanded to 17 cities in Nepal and established multi-layered services
Although most Bangladeshis and tourists from around the world stay in Thamel when they visit the Himalayan nation of Nepal, Shamsun Nahar had to stay in Lalitpur for work.
Five kilometres from Thamel, this city is renowned for its palaces and temples.
However, the most interesting places in the Bagmati province where these cities - including the capital Kathmandu - are located, are elsewhere.
If you want to see the Durbar Square, Garden of Dreams, Asan Bazar, Buddha Stupa, and the Pashupatinath Temple, among other places, you have to move in and around the Kathmandu Valley, where public transport is scarce and taxis are expensive.
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As a result, ride-hailing services in Kathmandu are popular not only among tourists, but also among the locals.
Shamsun Nahar was surprised to find that Pathao, whose ride-sharing service she uses in Dhaka, was operating here as well. She used it often to travel from Lalitpur to Kathmandu.
"I felt really good when I found Pathao in Kathmandu. It felt closer to home," she told The Business Standard.
Pathao has been operating in Nepal for about six years, starting its journey from September 2018.
In Nepal, ride-hailing services first appeared in 2017. It kept growing till 2019 when the government cracked down on platforms like Pathao, and Tootle– a Nepalese company.
By then the people had already tasted the privileges that came with ride-hailing services, so the government had to back down from its plans.
At present, among several ride-hailing groups active in Nepal are Pathao, Tootle and InDrive- a California-based Russian platform which also operates in Bangladesh.
After talking to several local users and riders, it appeared that Pathao is dominating the Nepalese market. Booking vehicles through Pathao also seemed faster and smoother in Nepal than in Bangladesh.
Bharat Shrestha, a taxi driver we met at the Tribhuvan International Airport, said that although the app fares can sometimes be less than metered fares, he still registered on Pathao because it gets him a regular flow of customers.
"I get more trips with Pathao," Shrestha said, adding, "It is popular here."
In a conversation with The Business Standard, Pathao CEO Fahim Ahmed said that his company has expanded to 17 cities in Nepal and established multi-layered services, thus boosting its popularity among users and riders.
"Even though Kathmandu is a smaller city compared to Dhaka – perhaps about 20-25% of its population – the scale of the ride-hailing market is actually much closer to Dhaka, considering their relative sizes," he told The Business Standard.
There are several reasons behind this.
Firstly, there is a far more acute lack of public transportation options in Nepal, he said. Dhaka residents have access to buses, metro, rickshaws, auto-rickshaws etc, but such affordable modes of transport are limited in Kathmandu.
Secondly, Pathao usage among female users is much higher in Nepal, something Fahim thinks is "often underappreciated". The female users represent about a third of Pathao rides in Kathmandu.
And thirdly, there is a much more active tourist base in Kathmandu, which also leads to the popularity of the service.
"Overall, we have been quite impressed by the scale of the market, which is approaching a size closer to Dhaka despite Kathmandu's smaller area and population," Fahim said.
In Bangladesh, Pathao has around 10 million registered users and 300,000 riders. In contrast, they have four million registered users in Nepal and over 150,000 riders.
But as Fahim mentioned, if you consider the population concentration in Dhaka (22 million), compared to Kathmandu (1.4 million), the relative proximity of the growth story becomes clear. In fact, the entire population of Nepal is around 30 million.
Pathao started in Nepal with bike ride-hailing services and then expanded into cars, followed by food delivery, which is now one of the most dominant parts of their business. They have thousands of 'Pathao Heros' in Nepal who deliver food on bicycles.
Due to the country's mountainous nature, they initially started food delivery on bikes, because bicycling in this terrain can be strenuous. But the sustainability of food service depends on a cheaper mode of transport, hence the cycles.
Currently, nearly 100% of Pathao's food service is delivered through bicycles, reducing their operating cost while maintaining service quality and delivery time.
The Pathao services in Nepal are not without challenges, though. Besides fierce competition, which is coming from InDrive at the moment, they are in need of constant work in improving their map.
However, Fahim said it didn't significantly hinder their service as "our ongoing regular users as well as riders are quite familiar with the navigation, since Kathmandu is a smaller city. So, it generally doesn't tend to be a problem. But locating the addressing convention is different, and the quality of the map is subject to improvement."
Nepal is still in its early phase of the e-commerce world, much like Bangladesh.
But Pathao seems to have played their game well in a nascent market.
"We built our customer relations in Kathmandu first, and then approached the smaller cities. Now, we are utilising our presence there with our infrastructure and brand value to bring other services of which we already have an expertise in Bangladesh," said Fahim Ahmed.
