InDriver makes Pathao taste its own medicine!
There is a new ride sharing app in town called InDriver. While Pathao has become a behemoth of sorts, having crushed its competitor, Tootle, through extremely competitive pricing for both the riders and customers, Indriver seems to have directly borrowed this strategy from Pathao’s playbook. There has been a noticeable surge in the number of In-Drive customers recently owing to its competitive pricing over Pathao.
InDriver has an interesting business model. The customers are able to pick their own fare and the rider is allowed to counter the offer. This consensus based model strips the agency away from the ride sharing platform. There has been growing number of complaints about Pathao regarding random ‘surge’ application to the fare; to routing a longer path in order to levy higher fare. Moreover, Pathao charges 20 percent commission to its riders as well. On the contrary, InDriver has been operating in Nepal for 1.5 years without any commission structure and only recently started charging 10 percent to the riders.
One of the primary comparative advantage Pathao had over Tootle was its ability to increase its rider and customer base while suffering loss. Being an international investment from Bangladesh with the service running successfully in few other countries, Tootle simply could not afford to compete with Pathao in terms of pricing. However, such is irony that being a global passenger aggregator, InDriver is currently pushing forward to crush Pathao with the same strategies Pathao crushed Tootle before.
The issue with these strategies, however, is that ultimately it is the end consumers who will end up stuck with a monopoly being forced to pay exorbitant fares once the competition is over. Market is supposed to work naturally in that the price is defined by the supply and demand. However, by using anti-competitive strategies like these( basically rooting out competition with lesser ability to compete under losses), it seems that one ride sharing app will end up becoming a monopoly.
Remember customers, there is nothing called freebies or zero commissions. If as consumers we want better pricing, it will only exist when we have competition in the market. The very nature of any corporation is to maximize earning and allowing anti-competitive behavior will only end up hurting us in the long run. Moreover, since most of the nations in the world have stringent regulations when it comes to offering freebies and anti-competitive pricing. Having a strong legislation against anti-competitive, anti-trust behavior is, thus, imperative to Nepal.
Moreover, it seems that as of writing, InDriver is not registered as a business in Nepal. While the Facebook page is open, the brand does not have a verified address or email address. Dealing into the legality of the new app requires further research and could be an article in itself. So, BrandGuff refrains from making a judgement call for now!
