In Nepal, ride-sharing companies have experienced significant growth in recent years, contributing positively to the country’s GDP by generating employment opportunities for numerous riders and company employees. However, the industry faces a new threat in the form of offline riders who are disregarding ride-sharing companies. This phenomenon has become a major concern for the industry as it poses a significant risk to both customer safety and the ride-sharing market.
This article explores the issue in detail and analyzes its impact on the ride-sharing industry in Nepal. Today, everyone is familiar with the ride sharing transportation system. Sharing a ride has become an increasingly popular mode of transportation, offering a convenient and cost-effective alternative to traditional taxis and public transportation. Two of the most popular rides sharing platforms in Nepal are Indriver and Pathao, which were established in 2019 and 2018 respectively. These platforms have quickly gained a significant following and have opened up new opportunities for riders and passengers alike to travel quickly and efficiently. They have also helped to ease the burden on Nepal’s public transportation systems.
Pathao is a digital platform company based in Dhaka, Bangladesh, that offers on-demand services such as ride-sharing and even food delivery as Pathao Food in the context of Nepal. The company is also present in two cities in Nepal: Kathmandu and Chitwan. Pathao was the first ride-sharing company in Bangladesh to receive an enlistment certificate from the authorities and in Nepal as the most used ride sharing platform. Another ride sharing service that has gained popularity in Nepal is InDriver, which was first established in Russia in 2013 and launched in Nepal in 2019. InDriver has quickly gained traction, particularly in the capital city of Kathmandu, offering another affordable and go-to option for many Nepali residents. Till now there are more than 30 ride sharing service companies registered in Nepal.
How the ride sharing system works
When we use an online ride-sharing service, we pay the fare to the driver directly. However, the total amount paid includes commission for the ride-sharing company and taxes paid to the government. The commission paid by the driver varies from company to company and can range from 10–30 percent of the total fare. This commission is the primary source of revenue for the ride-sharing companies. In addition, the ride-sharing companies are also responsible for paying taxes to the government, which can range from 2–10 percent of their revenue. These taxes help to fund various public services and infrastructure projects for the country. Therefore, while we may only see the fare paid to the driver, there are additional costs and fees involved in using online ride-sharing services.
There is a real risk of declining public confidence in the ride-sharing service due to the lack of proper regulation and safety measures.
Another important aspect to consider when using ride sharing service is the insurance coverage they provide. In the unfortunate event of an accident during the trip, both the passenger and rider can claim up to 1,00,000 rupees to cover their hospital costs. Also, it is essential to note that ride sharing companies not only offer insurance coverage but also provide emergency healthcare services through their app. In the event of an accident, passengers and riders can request an ambulance through the app and receive prompt medical attention. This service is only available to those who use the app to book their rides.
What’s the problem?
In the central parts of the city, where people are likely to have more crowd and transportation, it’s not uncommon to see numerous bike riders waiting for ride requests from passengers. But, many of them refuse to take requests through the ridesharing app and instead approach potential customers directly, offering their services in person. By doing so, these riders are able to avoid paying commissions to the ridesharing company, thereby keeping more of their earnings for themselves. As a passenger, we take the service to have the benefit of online convenience and cost effectiveness. People from various walks of life use ride-sharing services, some of the most frequent users are those who live in city areas and do not own a car or prefer not to drive. This includes students, commuters, employers, government workers, tourists or simply a person visiting a hospital, mainly people who have a limited amount of time.
In such a situation, passengers raise a pickup request but the request is not picked up by any riders and, so, we as passengers are compelled to take the offline ride offered by riders. In hurry or pressure or less fare provided from the rider we take the ride without the means of a ride sharing platform. As a student, I have myself faced the same issue where there were a lot of riders waiting to only take offline ride service without preceding from their ride sharing platform. As a result, when taking a ride in offline mode, the transportation is not registered through the app, which means that we will neither be able to get ambulance support nor be eligible for any claims in case of an accident. Thus offline ride-sharing services have some significant drawbacks that need to be addressed.
Drawbacks to address
Following drawbacks need to be addressed. One significant issue is the impact on the revenue of ride-sharing companies and the government’s potential revenue due to illicit transactions. Second, the lack of proper regulation and oversight in the offline ride-sharing industry increases the risk of fraudulent activities, such as drivers charging exorbitant fares or operating without proper licensing and insurance. Third, the absence of insurance coverage in offline ride-sharing is a significant concern for both riders and passengers, as medical expenses can quickly accumulate in case of an accident.
Fourth, there is a risk of declining public confidence in the ride-sharing service due to the lack of proper regulation and safety measures. Likewise, offline riders may charge passengers arbitrarily without any limits or regulations, leading to further exploitation and financial harm to users. Besides, the risks of non-registered riders posing as online drivers and offering rides are also present in offline ride-sharing.
We have seen numerous examples of accidents occurring during offline rides, highlighting the potential dangers of utilizing unregulated ride-sharing services. It is challenging to determine the true intentions of non-registered riders and whether they have the proper qualifications and training to provide safe transportation. Raising awareness among the public about the potential dangers of unregulated ridesharing services can help to prevent accidents and exploitation.
Utsav Poudel is a student of Computer Engineering at Vellore Institute of Technology (VIT) University.