The Covid-19 pandemic has resulted in a global financial crisis. Though the impact is global, countries like Nepal have been hit especially hard. Many businesses are on the verge of bankruptcy and some have shut down due to mounting financial pressure.
However, the recent relaxation of lockdown has enabled some businesses to resume their services. But, some services are still on hold and are unlikely to resume soon. One of such services is the Mobility service such as Pathao and Tootle.
We spoke to Mr. Asheem Man Singh Basnyat, regional director of Pathao, about the impacts of the Covid-19 crisis and lockdown on Pathao. Along with it, we discussed the possibility of resuming its services and related challenges to overcome the crisis.
Can you tell us how Pathao is affected by the Covid-19 crisis and lockdown? How has it affected your growth plans? What steps are you taking to exit the crisis?
Pathao’s core service is totally shut down at the moment. And, our plans for 2020 have taken a back seat.
We were planning to expand our services to other cities but it’s unlikely given the situation. Also, it has halted the launch of our food delivery service inside Kathamndu. We were excited and ready with a roll-out plan for food delivery service but it looks like it won’t be happening soon.
However, the launch of food delivery service inside Kathmandu is now a priority over expanding our bike services in other cities.
The government has eased the lockdown to some extent. In the first stage, two-wheelers are allowed to function, but without pillion riders. This scenario has created a roadblock for Pathao to start its two-wheeler operations. How are you dealing with this issue? Have you spoken with the officials of the government about this issue?
We have been actively engaging with the government since the beginning. In the early stages of lockdown, the government had problems with grocery transportation and the transportation of patients who needed regular treatments.
To help with this, we were ready to transport patients to and from the hospital using all the necessary precautions. We had regular meetings with the representatives and the high-level committee was on-board with our plan but the ministry of home affairs rejected our proposal. They cited that only ambulances can carry patients.
So, we are in constant touch with the government. Right now, we are trying to explain how we can help the denizens with our services and how ride-sharing can benefit in this situation. If given the green light, we are well prepared to start our services right away.
Even as we speak, we are in talks with CCMC (Covid Crisis Management Centre) over possible solutions to resume services with utmost safety.
Covid-19 is here to stay for at least a few years. During this time, we know social-distancing is a must to contract the spread of the virus. What are some safety measures that Pathao is planning for its users?
Of course, customer safety is the top-most priority and we have been exploring lots of ideas to mitigate the possible risks.
First of all, our riders can wear suits like protective gear which can be sanitized along with disposable masks and gloves. We can provide sanitizers to each rider so that they can offer it to customers before riding the bike. Also, bikes will be cleaned after each ride. These are some possible actions we can take to minimize the risk.
Regarding Pathao cars, we are thinking of sealed cabins to minimize contact between the passenger and driver. Also, we are exploring a possible automatic mechanism to sanitize the interiors after every ride.
To be fair, bike rides are safer than public vehicles. If and when public vehicles re-open, we should keep in mind that there are lots of contact points in vehicles. And, the virus could spread even if we follow safety guidelines and safety measures. So this is where bike rides are much safer due to fewer contact points and also it’s easier to clean and sanitize bikes than the large vehicles.
So, we are looking at various possibilities of minimizing the risk. Not only this but it’s easy to perform contact tracing via our platform as well. It’s a matter of a few minutes, we can map out the entire contact tree from our system if there’s any case related to the coronavirus.
Furthermore, we are exploring the possibility of bike sanitizing stations as well. There could be multiple stations around Kathmandu where the bikes can be sanitized and every ride-sharing service could share it. But it’s a far fetched dream right now. We obviously need the government to support us with this. But, if it was possible to resume our services with one of those installed in our office, I would.
Covid-19 has created a financial burden on all of us. Businesses are going bankrupt. How has this situation affected Pathao financially? Is there any change in the internal employee structure? Also, are there any plans to raise funds?
Yes, the current situation has led to a huge financial hit. Some businesses have even shut down for good.
For us, we are in survival mode right now. We are using the funds we had saved up for launching the food delivery service in Kathmandu and the expansion of our ride-sharing service. Also, the core team has decided to take a minimum salary, so that has helped us expand our runway from 6-7 months to almost one and a half years.
About, raising funds, we are not looking to do so. We think we can survive until the situation gets normal, which is probably 6 months down the line. Plus, we will be cutting costs which are no longer necessary.
Many of the ride-sharing platforms globally has changed its business model, from ride-sharing to goods and parcel delivery. We know that Pathao was an experiment with Parcel delivery internally. Can we expect this feature to roll out anytime soon?
Its true we are exploring other options such as parcel delivery to supplement our business. If there’s a good demand then we might start it but we don’t want to commit right now, as our main service could resume in upcoming days. And, we don’t want to put further stress on our budget which is already stretched. So, this feature could rollout after our normal services have been resumed. But, it won’t happen right now as it could turn out to be a suicidal move.
Except for this, we are already working with the Infi.Store as their logistics partner. Infi is actually a test project and it was a hobby project of someone we are connected with. Then we pushed it to be big during the lockdown. We took their project and provided our resources which were going to waste and it has turned out to be quite a success. This is something positive that came out of this lockdown and this has also made us realize that we can help startups reach the acceleration stage from the incubation stage.
How do you see the future of mobility in Nepal in the coming months?
There are two sides to this and on the flip side of the coin, there will be a lot of people who will buy their own vehicles due to risks associated with public vehicles. And, this could deviate our potential customers.
On the other side, lots of people are getting laid off and there will be lots of jobless people in Kathmandu alone. So, we have a chance to observe these people with the gig economy and I believe Pathao is one of the front runners in terms of the gig economy. And, this could result in oversupply.
Now, about the demand, it’s obvious that people are not confident enough to share a ride with a complete stranger right now. And, it’s our responsibility to build up that confidence. But, there’s an even bigger question, how many people have the confidence to use public transportation with 30 or more strangers?
We can surely expect a massive price hike as public vehicles might only be able to run with 30-40% occupancy. Considering this situation, ride-sharing could cost almost the same price or even cheaper than public transportation. So, there’s a chance of over-supply and an increase in demand. But there’s a chance that our customers may deviate as well.
So, it’s important not just for Pathao but for the whole ride-sharing industry to build up the confidence in riders and customers. If we can do this, then we might see a boom in the ride-sharing industry. But, if we fail to do so, it might decline before it gets back up in the coming years.
Lastly, what advice would you give to startups in Nepal that are strategizing their next survival move?
It’s important for any business to adapt to the situation. Some of the companies like Foodmario and Bhoj have done a tremendous job of switching to grocery delivery and now they are back again to food delivery.
Another important thing is to put your company first rather than yourself. You have to treat your company as your own child, feed it first then think about yourself. As long as companies manage their cash flow properly and plan for the worst-case scenario I’m sure they can survive. But, it’s a must that they adapt to the situation, we can either adapt or go extinct.