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Ride-sharing apps: Another rent-a-car service?

Global ride sharing giant Uber had celebrated its two year anniversary in Bangladesh in the last month. Uber has logged a meteoric rise in these two years and it has shown other local entrepreneurs the way to venture into the ‘ride-sharing’ business. Following in its footsteps, local ride-sharing services like Pathao, SAM, Obhai and Sohoz have emerged.

What is ride-sharing? 

Ridesharing services are companies that match drivers of private vehicles to those seeking local taxicab-like transportation. Ridesharing services are available mostly in large cities in many countries. Some of the biggest names in the industry are Uber, which exists in 58 countries and whose name is almost synonymous with ridesharing services, and Lyft, which covers many American cities. Ridesharing services have been seen by some as controversial for various reasons. The legality has been brought into question, even as these services continue to operate, with laws varying by location. Taxicab companies have complained about the competition. There has also been concern about the safety of the drivers, who many feel have not been vetted sufficiently.

However, all of these mobile app-based transport providers are acting like rent-a-car services in Dhaka, even though they are supposed to provide ‘ride-sharing’ services to commuters. By doing so, they are flouting the guidelines formed by the government to regulate the ride-sharing service sector.

These apps are barely adhering to the definition of ride sharing, where the passenger often covers half of the cost of the trip. Here both the driver and the rider head in the same direction. The rider’s goal is to subsidise the cost of the trip for the driver.

Almost all the cars under ride-shairng apps in Dhaka are now running for profit and the drivers have no intended destination. These cars are offering transportation services just like a commercial taxi or rent-a-car service.

This correspondent had completed over 50 trips using the ride-sharing apps and interviewed the drivers. In almost all the cases, the car was driven by a professional driver, who rented the car either from a garage or from a car owner on a contractual basis.

Rabiul Alam is a professional driver, who had been driving the car of a university teacher until this March. But now, he has acted on the advice of a friend and taken a ‘contract’ for driving a car under the Uber service.

“I used to get a salary of Tk. 15,000. But my friend told me I could easily earn upto Tk. 25,000 if I start driving under the Uber service. I took his advice and rented a car from a garage for Tk. 23,000 per month. The fuel cost is mine. I can make anything between Tk. 20,000 and Tk. 25,000 a month if I drive the car for 10-12 hours a day,” he said.

Minhaz Uddin, another Uber driver, also has rented his car under a contract from a private car owner. “I give the car owner Tk. 17,000 a month and drive the vehicle under the UberX service. I can earn at least Tk. 20,000 a month even after paying for fuel and maintenance cost,” he said.

Fintech recently sent a set of questions to Benchmark PR, the designated PR firm for Uber in Bangladesh. The questionnaire included the following queries:

• The BRTA in a recent circular asked all the ride-sharing companies, including Uber, to share their vehicle data with it within a month. When does Uber plan to submit their data?

• As per the BRTA circular, Uber has to pay Tk. 1,200 for each of the cars registered with it and Tk. 800 for the bikes. Who is going to pay for that? Is there going to be a tripatriate agreement among the riders, Uber, and the BRTA?

• Uber is yet to disclose the number of vehicles registered with it. Will it disclose the ‘accurate’ and ‘updated’ number of vehicles now?

However, Fintech is yet to get any reply from the PR firm. Fintech also contacted Pathao and Sohoz for comments, but they declined to speak on the matter.

A good number of people are using these ride-sharing services to make quick bucks. Shumon Islam and his four friends bought a car in September 2017. They rented the vehicle out to a professional driver. “We earn a flat Tk. 20,000 per month from the car. We spent Tk. 980,000 for the car and hope to have return on our investment in five years,” said Shumon.

Fintech contacted the BRTA director (road safety), Mahbub-E-Rabbani and asked him whether the regulator was aware of this practice.

Rabbani replied in the affirmative, saying they were trying to regulate the sector through proper guidelines. “Ride-sharing services have become popular. We have to keep that in mind. We now have a guideline and are trying to streamline the service as per the guidelines,” he added.

“We have checked how ride-sharing platforms operate in other countries and found no difference. Even in neighbouring India, many professional drivers use Uber like rent-a-car service,” he said.

Violations of ride-sharing guideline

After services like Uber and Pathao (for motorbikes) became popular in the city, the government enacted ride-sharing guidelines in January 15 this year after discussions at different levels.

However, Fintech found out that none of the ride-sharing services has completed the BRTA registration in keeping with the guidelines.

The guidelines include obtaining an enlistment certificate from Bangladesh Road Transport Authority (BRTA) on a mandatory basis for companies and owners of the vehicles used for the services. Also, the ride-sharing firms must add an SOS button to their apps, which will enable users to send their location and other data through the 999 national helpline for any help.

The guidelines also stipulate the establishment of a system that will allow the police to monitor every trip from a control room. The companies concerned and the police are supposed to do the job jointly, but it has not been done yet.

The companies have to update data of their drivers from their national ID cards and crosscheck those with the Election Commission (EC), which oversees the database of citizens’ details, the guidelines state.

But the EC, in a letter on October 25, this year told the BRTA that it would not allow any company to access the database for crosschecking driver details before the firms get the enlistment certificate.

Besides, the call centres of the companies must remain open round the clock seven days a week. However, the companies that have received the BRTA’s permission to set up the centres are yet to open them.

So far, the 12 companies that have applied for the certificate are Uber Bangladesh Limited, Pathao Limited, Chaldal Limited, Akash Technology Limited, Golden Rain Limited, Obhai Solutions Limited, Rider Rideshare Inc Limited, Pickme Limited, Easier Technologies Limited, Akij Online Limited and Computer System Network Limited.

BRTA officials say they visited the firms after getting the applications for certificate, but could not provide them with what they want because of the unfulfilled conditions. BRTA director (enforcement) Abdus Sattar told Fintech that none of the firms has been able to fulfil the conditions chalked out in the ride-sharing guideline.

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