When Nafisa Yesmin heard about her brother’s accident one morning in early January, she opened the on-demand ride-sharing Pathao app on her phone. She thought that a motorbike would be the fastest way to commute to the hospital through the busy lanes of Gulshan, her neighborhood in Dhaka. Instead, she spent nearly half an hour refreshing the app, finding no drivers available. Feeling helpless, she began walking the five kilometers to the hospital. As she approached the end of her street, she found a group of motorbike drivers available to passengers. She hailed a ride from one of the drivers — a complete stranger — and made it to her brother’s side within 15 minutes. “I had no choice; I had to take a bike without any app and at my own risk,” Yesmin told Rest of World.
Dhaka, the capital of the world’s eighth-most populous country, Bangladesh, is among the top 10 most road-congested cities in the world, making motorbikes one of the best modes of transportation to use there. With over four million motorbikes in Dhaka alone, app-based motorbike ride-hailing could have been the perfect business, experts said. In recent years, the surge in motorbike rideshare apps in Bangladesh was meant to offer passengers a respite from intense traffic and an opportunity for reliable and secure on-demand transportation. But with companies requiring drivers to pay high commission rates, what was once thought to be a thriving industry is now struggling to sustain.
“When app usage is increasing in other countries, Bangladesh is moving backward. There’s a good possibility that we have destroyed the industry right in the beginning,” said Abu Saeed Khan, senior policy fellow at LIRNEasia, a think tank based in Colombo. “It could have been a great source of income for local and international startups.”
Motorbike taxis were first introduced to the country in around 2016 by a host of local companies, such as Pathao, Shohoz, and OBHAI, and U.S.-based Uber. In 2018, the ride-sharing industry in Bangladesh was estimated to be worth $260 million and accounted for about 23% of the transport sector in the country, according to the Policy Research Institute of Bangladesh (PRI). By 2025, the ride-sharing sector is expected to reach $400 million, PRI told Rest of World.
Any bike owner in Bangladesh can apply to a ride-hailing company by submitting their driving license and national ID card through its app. The companies approve bikers after conducting a background check with the BRTA. Drivers pay a commission — which can go as high as 25% of the fare — for each booking they get via the app.
As bike-sharing became popular in Bangladesh, drivers increasingly bypassed apps and connected directly with passengers. These “off-app rides” were more lucrative for drivers who wanted to avoid paying commissions to app companies. Drivers are abandoning Pathao at an “alarming rate,” a company source told Rest of World on condition of anonymity. The company had noticed that some drivers and passengers are leaning toward “off-line trips,” Pathao told Rest of World in a statement but declined to share any more details. The company said it has about 300,000 drivers on its platform.
But drivers say the situation is not simple as their just abandoning apps. “We work in rain and sun, and pay up to 25% commission on our earnings, which is extremely high. We still do not know whether ride-sharing is a service or a trade. We are still not considered workers,” Belal Ahmed Khan, general secretary of Dhaka Ride-sharing Drivers Union (DRDU) told Rest of World.
Khan said that the only way to keep drivers on the apps is to cut commissions to under 10%. Last November, Pathao reduced its commission to 10% during peak hours (8 a.m. to 11 a.m. and 5 p.m. to 8 p.m.). During off-peak hours, the app still charges up to a 15% commission.
Uber still charges drivers in Bangladesh up to a 25% commission. “Sustaining a safe and reliable ride-sharing platform in Bangladesh requires significant investments. Our commission reflects the need for us to reinvest in tech and other solutions, to ensure riders and drivers get the best quality service,” an Uber spokesperson told Rest of World.
Borhan Hossain, a driver who started offering rides via bike-sharing on Uber three years ago, stopped using the app last year because he was struggling to make a profit. “If I earn 100 taka ($1.15), fuel cost is 20 taka, and another 25 taka is for the company’s commission. I have little money left in my account. I have stopped using apps because that’s not profitable,” Hossain told Rest of World. “Also, through apps, I don’t get the money instantly. That’s why I decided to take rides without apps. In this way, what I earn goes to my pocket.”
Another Dhaka-based driver, Mamun Mia, said getting passengers on the road saves time, which means he can do more trips and make more money. “There is a huge demand on the apps during office hours, but it takes a lot of time to go to a passenger’s location to pick them [up]. If I stand beside the street, I get passengers without wasting time. It is more profitable than using apps. I have not taken rides through an app for the last nine months.”
Customers are also happy to abandon the apps and go back to street-hailing for cost and time effectiveness. Twelve customers who utilize motorbike-sharing rides told Rest of World that they were happy bypassing the apps because they could negotiate better rates directly with drivers. Uber’s base fare in Bangladesh is 50 taka ($0.58), and it charges 21 taka per kilometer after that. Pathao charges a base fare of 25 taka and 12 taka per kilometer after that. Pathao also levies a “waiting charge” of 0.5 taka per minute if a bike is stuck in traffic.
Within the past year, at least two motorbike taxi businesses, Shohoz and Obhai, shut down in Bangladesh. In October 2021, homegrown multi-services startup Shohoz laid off its ride-sharing team, and Obhai shut its bike-sharing service after it saw a sharp fall in the number of users on its platform.
While bypassing apps might seem lucrative to drivers and commuters, it can be very risky, law enforcement officials told Rest of World. Many cases of theft, robbery, and mugging have been reported on such off-app rides, a Dhaka Metropolitan Police (DMP) spokesperson said. In May 2021, the DMP issued an advisory to passengers asking them to avoid hiring unauthorized vehicles and use apps for ride-sharing.
In January, representatives from the two largest players in the sector, Pathao and Uber, along with other ride-sharing companies, met BRTA Director Sarwar Alam to flag concerns about drivers directly contracting passengers. “They told us that the drivers are breaking the rules and taking passengers without using the app. We said we will monitor this, but you have to reduce the commission rate,” Alam told Rest of World.
Companies believe the commission they charge is fair, given the layer of safety they deliver. According to its website, Pathao mandates helmet usage and offers live location sharing, a two-way rating system, and a rapid response team that provides support in emergency situations. Uber Moto has a 24-hour safety line in Bangladesh to report misbehavior by a co-passenger, a dispute with a driver, or a breakdown. The Uber Moto app includes a “RideCheck” feature that flags trip irregularities, like a midway drop.
“We strongly discourage off-platform trips, as these have no accountability or safety support for either riders or drivers,” Uber said in a statement to Rest of World. “Trips taken offline are not on GPS, and, therefore, cannot be tracked. Riders and drivers in an offline trip don’t have access to any safety feature hosted in the Uber app or access to the safety support team of Uber. Also, riders do not have visibility to the driver’s identity (name, picture, rating, etc.) at the time of booking.”
If a crime happened during a ride that was not booked through its app, Uber said in the same statement, a customer would not have access to basic information like the driver’s name and picture to file a police report.
Meanwhile, drivers believe the Bangladesh government is failing to protect their interests. Drivers are charged an Advanced Income Tax (AIT), which is imposed for commercial purposes even when ride-hailing apps don’t count them as full-time employees. Over the last couple of years, bike-sharing businesses have also faced multiple bans by the government as part of health and safety guidelines established during the Covid-19 pandemic.
Late last September, more than 1,000 drivers across Bangladesh went on a 24-hour strike to demand commissions get reduced down to 10%, recognition of drivers as full-time workers, and protection against police harassment on the road. In Dhaka, the drivers formed a human chain on the side of a road in protest.
“In the last five years, the government has been unable to develop laws for app-based ride-sharing. As a result, we are hounded and denied our rightful pay,” said the DRDU’s Khan. For the ride-sharing sector to survive, government officials, law enforcement, the app companies, and drivers must come together to reach a solution that works for all of the stakeholders, Dr. Md. Shamsul Hoque, a leading transport expert and professor at the Department of Civil Engineering at the Bangladesh University of Engineering and Technology, told Rest of World. “There is no alternative to using apps to ensure safety of drivers and customers. If this problem is solved, Bangladesh can be a world leader in this sector,” he said.