Uber, currently, remains one of the two major leading companies in the ride-sharing market in Bangladesh. However, grievances remain aplenty among drivers and passengers. Coupled with inflation and price hikes, Uber's already exuberant fares became steeper for the masses in the last few weeks.
The Business Standard sat down with Shiva Shailendran, Head, Local Operations and Supply, Uber India & South Asia to discuss the current state of affairs and the ways forward for Uber Bangladesh.
How do you assess Uber's performance here? Also, how do you evaluate the growth of the on-demand economy around the world?
During the pandemic period, ride-hailing services were definitely impacted. In fact, Uber was one of the companies that proactively told people not to travel. In Bangladesh, specifically, we closed our Moto products and even car services. Our entire business was shut down for a while.
We used this opportunity to innovate [our services] in Bangladesh. We came up with a new product in Bangladesh called Connect where people can send parcels and packages to their friends and family without needing to step out of their houses.
As we come out of the pandemic and as people start moving out, we fundamentally believe the need for a service like Uber will always be required. We are very bullish on ride-sharing services, and more so for Bangladesh, because we see this as a high-growth market.
The total number of people who use Uber in Bangladesh is roughly around five million. It is less than 5% of the population. So there is a lot more to penetrate. We just need to find the right product-market set.
We have expanded to 20 cities and all of the eight divisions and most of the cities are in the Moto segment market. There are new products in the pipeline. I don't want to disclose it, but these are different kinds of products which will meet the requirements of the consumers at different price points.
Uber has been struggling to make a profit, reports surfaced in the global media about its billions in losses. How does Uber plan to recover from the losses and make a profit?
Bangladesh is an investment market for us. We strongly believe in investing in the market. As I said, we haven't penetrated the full market. So we definitely want to ensure that we continue to stay focused on the business here. We will continue to invest in the market, be it financially, be it in technology, be it in terms of new products.
Increasing regional rivals have competed with Uber in countries like Indonesia, Thailand, Vietnam, Malaysia, Myanmar and Cambodia. The challenges from the competition are perhaps only going to increase. What is Uber's game plan?
We fundamentally believe that competition is good for us. Competition forces us to innovate, it ensures that we are ahead of the curve and we are providing the right mobility solution for the partner.
When it comes to a strategy with respect to the market, every market is unique. For example, in Bangladesh, Moto was a bigger product than cars. And every market has its own new answers.
But the strategy that works for us in every market is that our consumers get a magical experience. And if they transact with us, invest; and if our driver-partners have sustainable earnings on the platform, and if the platform is safe for both the driver and the consumers, then that strategy works to make sure that we are the market leader.
I have interviewed many drivers, and they are unhappy with Uber's commission policies in Bangladesh. We have seen many bikers, especially, take offline trips because Uber's 25% commission is too high. How would you address this?
See I think there is a lot of investment that goes into building a reliable and safe platform. Be that in terms of technology, manpower, be that in terms of features and the kind of safety we provide. We do documentation and verification of every driver-partner who onboarded with us. So a lot of investment goes into building a safe and reliable platform. I think the commission we charge is fairly representative of the quality of service that we provide.
Do you have any plans to reduce the commission fee in response to the drivers' continued demand?
It is [the commission fee Uber charges its drivers is] something that we keep talking about with the drivers. That is something we will keep reviewing on a need basis.
So for now, there is no chance of reducing the commission?
As I said, it has a lot to do with the kind of services that we provide and the quality of service that we provide. And we definitely don't want to dilute the quality of the service that we provide.
The ineffectiveness of Uber's complaint system has been strongly criticised. For example, in Bangladesh, most drivers ask passengers about their destination before boarding the passengers, and the bikers and drivers often cancel trips after making passengers wait for a long time. And even in cases when passengers cancel a trip because the driver is unresponsive, or make them wait for a long time, Uber charges passengers a fee for cancellation. How do you plan to address the customers' grievances?
What we are realising after the pandemic is that the driver-partner [equation] requires more flexibility in the way they work. They want more freedom in the way they operate.
For example, before the pandemic, we didn't show the destination to the drivers… but now have made those things available. I think they still ask these questions because of their behaviour. We are training drivers not to do that. We are actually also taking action when drivers indulge in doing that.
This is not a Bangladesh-specific problem. We are seeing this problem in lots of other markets including India.
More specifically about the complaint issue, customers are at a loss when something goes wrong and where they should complain. Suppose your drivers/bikers made you wait for a long time and did not cancel even when asked to. Uber may penalise the passenger once he/she cancels instead. There is no way for customers to complain before or after getting on Uber. How do you plan to address this?
Very fair feedback. We are working on a few features where we can provide support to our consumers here. But I think more importantly we need to address the root cause of this problem. Why does this happen? What do our drivers and passengers require that we are not providing? That is where a lot of our focus is going into.
How's the inflation impacting Uber in countries like Bangladesh or India? Is a stronger dollar having an impact on these countries?
Yes, of course. Inflation is definitely impacting us in multiple ways, and the most important one for us is earning for driver-partners. The pricing mechanism today takes into account a lot of factors like the cost of the assets, as the cost of the cars and the cost of the bike they drive keep going up.
Secondly, comes the inflation-related rise in the cost of fuel. Thirdly, the cost of everyday living is going up. So a lot of these things come into play in determining our pricing. We think our pricing fairly reflects the inflation and the need for consumers to pay for certain services.
Speaking of pricing, do you think the fares that Uber charges in Bangladesh are realistic? I have spoken with many of your customers and they seem to find the fare too steep.
See it is a very delicate balance that we have to strike. On one side, obviously, consumers are conscious of the price that they want to pay. On the other side, you also have the drivers-partners who want fair compensation, which will take into account a lot of factors like the cost of the assets, cost of fuels, cost of living going up. So I think our pricing ensures that we strike the right balance between the consumers' needs and the drivers' needs.
Drivers' security and passenger harassment is a global issue with on-demand platforms. And Bangladesh is not immune to it. How is Uber addressing this?
Safety is not only about customers, it is also about drivers. We actually have a dedicated helpline safety toolkit for the driver-partners that we provide. Whenever a driver encounters an unfortunate event, they can reach us for help and we take immediate action. There have been multiple incidents where we supported the drivers in such situations.
The bigger concern here I would say is the offline trips, where the concerns about safety and security are a lot more. We strongly believe offline trips are not safe both for the drivers and the passengers, because you cannot track or report any incident.
And the platforms provide a lot of benefits. For example, we provide insurance to drivers. I think there is insurance for both drivers and passengers. I will get more details as I don't have the full details.
You discourage drivers and bikers from taking offline trips. But there is perhaps a clear correlation between offline trips and Uber's commission fee that drivers are charged.
Sure, we have been conducting a lot of listening sessions with the drivers to understand the reason for this behaviour. We are also doing certain corrective action from our side to see what best we can do.
In Bangladesh, after Shohoz left this market, you only have one competitor left now. It seems many of the players cannot fare well here. That raises the question if the on-demand market here is on the right track at all. How are you going to approach this market in future?
We are very bullish on this market. We have seen in the post-pandemic period that both demand and supply have come back very strongly. That is the reason we have expanded to more cities. We fundamentally believe in the growth story of Bangladesh. We fundamentally believe in on-demand ride-sharing platforms being the leading mobility services for the masses. There is no going back on that commitment to Bangladesh. Uber is committed to doubling down on investment in Bangladesh.