Dr. Fareesa Malik NUST Business School, Pakistan Social and Economic Implications of Platform Business Models - Case Studies of Uber and Careem in Pakistan Dr. Fareesa Malik NUST Business School, Pakistan

Introduction Research in progress project Higher Education Commission (HEC) start-up grant Project: “A Study of Sharing Economy Platforms and Digital Businesses in Pakistan ” Case studies to examine digital transformation: Transportation Sector (Uber and Careem in Pakistan) Retail Sector ( Daraz.pk, Alibaba, Telemart etc) Gig Economy, Crowd sourcing and Freelancing platforms (Digital employment)

Research Objectives To explore the adaptation, penetration and acceptance dynamics of sharing economy platforms in Pakistani context. To identifying the challenges and opportunities existing in the local market for future growth of the digital business. To highlight the knowledge gaps that help in defining the future research agendas for business scholars and graduates who are interested in this emerging research domain.

Teaching Objectives MBA Elective course (45 credit hours) has already been designed and offered in Spring 2018 to graduating batch MBA students. Disruptive technologies, platforms and sharing economy

What is Platform Business? A platform is a business based on enabling value-creating interaction between external producers and consumers. The platform provides an open, participative infrastructure for these interaction and sets governance conditions for them. The platforms overarching purpose: to consummate matches among users and facilitate the exchange of goods, services, or social currency, thereby enabling value creation for all participants.

Case study Digital Transformation of Transportation Industry

Uber Launched in single city in San Francisco in March 2009. In less than5 years, it was valued by investors $ 50 Billion; challenged traditional taxi industry without owning any car. Operational in 633 cities (Uber. Com, 2018). Innovations of product and services: self driving cars, delivering food to customers quickly and affordably using Uber Eats

Careem Launched in 2012 Middle East and North Africa (MENA Countries), Pakistan and Turkey. Operating in 14 different countries, approximately more than 100 cities with 975 thousand and above drivers they call captains and serving more than 15 million users (Careem.com, 2018).

Both Uber and Careem are transport network companies that are defined as “a company that uses an online enabled platform to connect passengers with drivers using their personal, noncommercial, vehicles” and a company that “provides prearranged rides for compensation using a digital platform that connects passengers with drivers using a personal vehicle” (Voege, 2018).

Case Study Data Collection Qualitative Case Study Data collection through semi-structured interviews with drivers, customers, company employees Observation and informal talks with drivers while riding on Uber and Careem and with random customers Customers: 10 Drivers: 16 Employees: 4

Strategic Management Cost leadership Quality and Reliability (Curation Mechanism) Managing demand and supply (two sided network effects) – peak factors/surge price , promo code Sustainability of the business is a ? Bonuses and guarantee Customer Service App crash and network Curation mechanism (don’t book the ride no one can rate)

Social and Economic Implications Monopoly of traditional taxi drivers Increased mobility: Women are more comfortable travel alone using platform services (family can track) Self entrepreneurship: Part time work for many white collar employees and students/supplementary income New Job creation (full time drivers/female captains) Social acceptance : social pressure (Debate on Uber is/ is not a taxi) Inexpensive and affordable commutation option

Constraints/challenges Navigations issues in various regions IT issues (signal issues, 4G) Rude customers Security concerns/ who is responsible for individual security, insurance Easy to replicate business models Difficult to stop multihoming Absence of government regulations

Are we heading toward another bubble? Sustainability of the business?