Is UberMoto heading the Uber Eats route?
More and more ride-sharing bikers are reluctant to use UberMoto because of a high commission. The company in recent years closed down operations in a number of southeast Asian countries… will it head in the same direction here as well?
Mafizur Rahman, a ride-sharing biker in Dhaka, began working as an Uber biker about seven months ago. But in the last five months, he said, he did not use Uber to drive passengers.
"I have conducted more than 900 rides so far, less than 100 of those rides were through Uber," Mafizur told The Business Standard.
Mafizur had a prosperous life running two eateries inside Titumir College and International University of Scholars. Then the pandemic changed everything. With schools and colleges shut for months, he went bankrupt and signed up on ride-sharing apps to survive.
"When I realised that Uber takes 25 percent of my earnings as commission, I opted for another app to save more from my income.
Keep updated, follow The Business Standard's Google news channel
And why would I not? After fuel and other service costs, along with this hefty commission, what remains for me is not nearly enough," he added.
Mafizur is not alone. The Business Standard spoke to a few dozen app-based bikers who shared similar grievances while explaining why they do not prefer Uber.
Some of them are using other apps while some are taking on passengers without apps.
The disappointment with UberMoto is shared among the customers as well. Although the app has been a popular mode of transportation in recent years, lately, many customers we spoke to said they are struggling to get a ride on UberMoto these days.
"I had only Uber (among ride-sharing apps) installed since too many apps consume a lot of device space. But after continuously struggling to get a ride on Uber with the riders cancelling my trip for various reasons and the lack of available bikes during peak hours, I switched to other options," said Alif Hossain, a corporate official.
We reached out to Belal Ahmed, the Secretary of the Dhaka Ride-Sharing Driver's Union (DRDU) to understand the ride-sharing bikers' discontent with Uber.
Belal admitted the dissatisfaction is real.
"The bikers' apathy is a result of the excess commission that Uber charges. Considering the maintenance, fuels and cost of livelihood in the city, a biker or driver cannot sustain on what remains after a 25 percent pay cut as Uber's commission. And, this is why the bikers are turning away from Uber," explained Belal.
Despite having similar grievances as bikers, however, the car drivers have little to no option as Uber's local car competitors are not very popular. Also, the passengers would not get into any random car without apps for safety concerns.
But UberMoto has strong local competition and bikers without apps can easily get passengers on the roads, despite security issues, for shorter rides within the city.
Despite a number of attempts to find out whether the discontent among riders and users is being reflected in the revenues and market share of Uber, we reached out to both Uber and the supposed market leader in ridesharing bikes - Pathao - but failed to get a satisfactory response.
We asked Uber a few questions over email about commissions, revenues and other issues raised by ride-sharing bikers; followed it up over the phone a number of times and even visited their Uttara office.
Eventually, in a statement sent to The Business Standard through their PR in Bangladesh, Uber justified the commission they charge with the following statement.
"Maintaining a safe and reliable platform in Bangladesh requires significant investment. Our commission reflects the need for us to reinvest in tech and other solutions to ensure riders and drivers get the best service."
"Long waits and drivers cancelling trips fall short of our promise to deliver a magical experience to riders, and we are working hard to address any issues on our Moto platform," the statement added.
In their response, Pathao, who charges 15% commission, also did not provide their revenue and market share numbers.
According to an industry insider, Pathao currently holds around 70% market share of the ride-sharing bike while UberMoto's market size is roughly 30%.
What does the drivers' reluctance mean for Uber?
With the bikers turning away from Uber, challenges for Moto have turned out to be substantial. Moreover, Uber Eats' sudden departure from Bangladesh during the pandemic year despite online food deliveries witnessing exponential growth raises a lot of questions.
In spite of consistent promotional activities and generous discount offers, Uber Eats somehow failed to penetrate the Bangladeshi market when its competitors like Foodpanda and Pathao Foods continue to thrive.
Moreover, Uber is also closing its services in various other parts of the world due to continuous losses so that it can focus more on places where it has sway over the market.
Uber has so far departed from countries like Indonesia, Thailand, Vietnam, Malaysia, Myanmar and Cambodia.
Uber Moto was launched in Indonesia in 2016 where it faced fierce competition from local Go-Jek. In two years, the global giant had to leave not only Indonesia but also the entire region by selling its Southeast Asian operations to Grab, another influential local ride-sharing company based in Indonesia and Singapore.
Uber's failure in Southeast Asia is not unique because if the first half of Uber's journey was about thriving and growing clout across the world, the second half is about retreat.
Uber is perhaps the pioneer in app-based ride-sharing, with the global availability of smartphones, tech talent and mapping technology enabling many Uber-like companies to emerge. So, local competitors of Uber, across the world, have the tech and the advantage of being 'local' on their sides.
For example, in Southeast Asia, Grab offered a cash payment option as early as 2012 in consideration of the millions of Southeast Asians who do not have credit cards. Uber did not realise this until Grab and Go-Jek emerged as the local market leaders.
Did Uber study the 'local' well?
So, what do the disadvantages of not being local look like in the case of UberMoto in Dhaka?
Perhaps it is the feature that hides the requested rides' destination from the drivers before they accept the ride.
Drivers association's Belal said that "All the places in Dhaka city are not the same. There are some places in the city where it is difficult to get in and get out. The drivers should have the right to know where they are heading."
"I believe Uber should study our culture and other perspectives and determine their policy in accordance," he added.
Recently, some ride-sharing bikers reported Uber sent them a message saying their earnings will be raised by 15 percent.
"Besides 25 percent commission, they keep Tk10 of passengers booking money. They are increasing drivers' earnings by 15 percent under pressure, but the charges are just passed onto the passengers. This is creating a rift among the drivers and the passengers. We do not want to cut the pockets of the passengers. All we are asking of them is to reduce their commission," Belal explained further.
The day we spoke to restaurateur turned biker Mafizur Rahman, we noticed that he was making Uber rides.
Mafizur said, "The other app I was using suspended me for three days because I cancelled a few trips. As a respectable man, I cannot just take on passengers from the roads like others. Otherwise, you would not have found me on Uber."
