Kareem changes his strategy once again as the competition gets tougher

Kareem changes his strategy once again as the competition gets tougher


Ride-hailing platform Carem has rejigged its strategy with the launch of a price bidding option for users, as competition in the ride-hailing industry gets tougher with the entry of Russian Yandex Group-backed Yango in the country. Is.

 

Karim already faces stiff competition from inDrive, also a Russian-based company. Bayka's entry into car-hailing doesn't help matters. Both companies allow customers to bid on fares and offer them more control over prices.

 

That is why, in a recent announcement, Careem launched Flexi Ride in the company's new bid to provide more flexibility to the customer. Careem has retained the original model of auto-generated fares with no bidding option across all categories.

 

What is FlexiRide?

The Flexi Ride feature may be a new offering from Cream, but it is not a new concept in Pakistan. This feature allows travelers to set their preferred price at the time of booking, with the average fare initially displayed.

 

Cream App users can bid up to 15 percent more or less than the average fare displayed, while Bykea and InDrive users have no limit. The rest of the process remains the same, where the price offered by the user is sent to multiple drivers, who either accept the fare or submit a counterbid. When the rental is agreed upon, a driver is appointed, who begins the journey.

 

Karim's justification for having a 15% upper and lower cap for the bid range is to prevent customers from offering exploitative fares to the captain and to keep prices fair.

 

The new offering was launched in Faisalabad and Multan in September, where it received a positive response, according to the company, prompting its launch in Islamabad and Rawalpindi in November. The company plans to expand to other cities like Lahore and Karachi soon.

 

Imran Saleem, general manager of ride-hailing at Careem Pakistan, told Profit, "We launched FlexiRide because we saw an appetite for it in the market based on surveys and routine connect sessions with captains and customers. Although the initial laps The take rate is promising, we will continue to monitor and see how it develops.

 

The company declined to share the exact adoption rate but informed Profit that the new feature has gained positive traction.

 

Flexi Ride is currently available in three types of rides, including Flexi GO, Flexi GO Mini, and Flexi Bikes. GO Premium is unchanged and maintains the existing variable pricing marketplace model. While Karim did not disclose the commissions charged to the captain, it was confirmed that commissions under Flexi would be lower than the original no-bid fare model.

 

Recently, there have been complaints that Karim's captains do not earn enough from rides, as they are charged a hefty commission of between 30% and 40%, as claimed by the captains. This means that for every Rs 1,000 a driver earns, anywhere between Rs 300 to Rs 400 will go to Careem. In discussions with Profit, Kareem has denied that he ever took such a high commission. A Careem representative said that the maximum commission the company charged drivers was 25 percent, which has now been reduced to 10-15 percent in some cities.

 

Careem was forced to charge higher commissions, as investors demanded higher returns from Careem's parent company, Uber.

 

Competitors like inDrive took advantage of the situation and launched without any commission. Now, Careem looks set to follow suit by introducing a similar offering and lower commissions for drivers.

 

Recently, Careem also announced that it will resume bonuses and incentives for its drivers, to shore up the supply of drivers that has fallen since the pandemic.

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