Pathao cuts commission on bike trips
Pathao has decided to substantially cut its commission on bike rides in line with demands from drivers in a move that could potentially increase the company's competitiveness and put pressure on rival Uber.
From today, the home-grown ride-hailing platform's commission will be 10 per cent during peak hours (8:00am to 11:00am and 5:00pm to 8:00pm) and up to 15 per cent during off-peak hours. This is the lowest commission on bike rides among all ridesharing platforms in Bangladesh.
Global ridesharing giant Uber currently takes roughly a 25 per cent cut on all trip fares in Bangladesh.
Previously, Pathao charged 15 per cent as commission on two-wheel rides in Dhaka and 25 per cent in Chattogram and Sylhet. The new commission structure is applicable nationwide.
The move comes following a six-point demand from the Dhaka Ridesharing Drivers Union, which includes fixing the commission at 10 per cent for all rides and bringing an end to police harassment.
On September 28, the union observed a 24-hour strike to press home their demands. The union then submitted letters to eight government agencies, including the Bangladesh Road Transport Authority (BRTA), in this regard.
The BRTA later sat down with officials of ridesharing platforms on October 6 to ask about their position on these demands. The authority had asked the platforms to submit a written statement to this end by November 4.
"At first, we will go for work abstention for two hours from 8:00am to 10:00am for five days per week from November 28 onwards," Belal Ahmed Khan, general secretary of the DRDU, told The Daily Star.
"Then we will go for more strict decisions if our demands are not met," Khan said.
He went on to say that no matter where they park their vehicles, police charge them for "illegal parking".
"So, give us (ridesharing drivers) designated places to park then," he added.
Their other demands include recognising drivers under the labour law, putting a stop to the cancellation of profiles with ride-hailing platforms unless the driver is involved in any crimes, and exempting listed ridesharing vehicles from advanced income tax payments.
Asked about the drivers' demand to cut commission rates, Mohammad Ali Armanur Rahman, chief executive officer of Uber's East India and Bangladesh operations, told The Daily Star in a recent interview that his company follows global standards and the commission is charged accordingly.
"We mainly reinvest the commission to upgrade our technology and expand safety features. A significant amount of the investment required to develop tech solutions mainly comes from our commission."
Another ridesharing platform, Obhai, charges 5 per cent to 10 per cent for CNG-run three wheelers while it takes 15 per cent for its car service in Dhaka and 10 per cent in Chattogram, Sylhet and Cox's Bazar.
"Obhai has historically kept the commission structure tolerable and affordable for its drivers," said Rahid Chowdhury, executive director and chief operations officer at Obhai Solutions.
"We don't want to burden the drivers with exorbitant commission rates," he added.
In a statement, Pathao said this change would contribute to making the motorcycle ridesharing service even more reliable for users, especially during peak hours.
This is because they will now enjoy the availability of more riders looking to maximise their earnings, it added.
"With this reduced commission, we wanted to recognise the largest and most loyal pool of riders at Pathao, who are ensuring a safe and reliable experience for our users," said Fahim Ahmed, chief executive officer of Pathao.
The business of ridesharing platforms took a serious hit amidst the ongoing Covid-19 pandemic, when lengthy lockdowns prompted a majority of motorcycle drivers to operate offline, which is illegal.
It took another blow when the BRTA in the middle of last year made enlistment with the authority a must for both the ridesharing companies and vehicles in order to offer their services.
Although around 1.3 lakh vehicles were connected with 12 platforms before the pandemic emerged, the number has dropped significantly as just 25,229 vehicles of 14 platforms were enlisted with the BRTA as of September 29.