Riding (this) Sawari into an uncertain future?

Shahi Sawari came into business in 2015. However, soon after the launch of the business, the
CEO came across news that Uber, one of the giant on-call taxi service around the world, aspires
to enter the Pakistani market. As a forward-looking leader, Junaid started to consider the
potential competition seriously and he, along with his team, evaluated the different options which
could be used to position Shahi Sawari as one of the best services available among its target
market.
Junaid, the CEO of Shahi Sawari, along with Mehras and two other founding members, initially
came up with the idea over the LUMS Startup Weekend, where groups had to present a business
idea and implement it in a very short period of time. The business idea was simple, yet very
impressive. The four members aimed to revolutionize the way people commute in Pakistan by
initiating the project of an on-call rickshaw service in Lahore. Today, the business was wellknown across Lahore for its service, especially among students who primarily commute on
rickshaw regularly.
While the team of young entrepreneurs were busy devising their future strategies, the On-call
Taxi Service Industry saw an increase in the number of businesses. Renowned services like
Careem and Uber entered the Pakistani market, while a direct competitor, Travly, which is
another Lahore based on-call rickshaw service, came into existence. The team, although very
optimistic about the mobile application, was concerned about growth and the future of the
business, and it aimed to capture a significant share of the growing market.

About Shahi Sawari

Mehras, an undergrad student at Lahore University of Management Sciences (LUMS), was a
very active member of the LUMS Entrepreneurship Society (LES), which he later led as the
society president. Passionate about entrepreneurship, he participated in many business idea
competitions and eventually, along with his team members, came up with the idea for an on-call
rickshaw service during the LUMS Startup Weekend.
Travelling costs and the hassle to arrange for conveyance is a menace for most students and
other individuals, especially for those who do not privately own the means of transport. Mehras
intended to cater to this segment of the market by revolutionizing the way they commute on
rickshaws, which is one of the most common modes of transport available in Lahore and across
many cities of Pakistan. Shahi Sawaris founders identified various problems faced by this
particular segment (Exhibit 1) and intended to offer an innovative, efficient and fair mechanism
of arranging for one.

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In March 2015, this team of young entrepreneurs successfully pitched their idea at LUMS
Startup Weekend. The business idea was very simple. It would serve as an intermediary, by
implementing the aggregator model, between the commuters and the rickshaw drivers, and
allow both sides to transact efficiently through a text messaging service. Commuters, using Shahi
Sawaris website, would book a rickshaw and be relieved from the tedious task of actually
finding one and negotiating the fare. On the other hand, the rickshaw drivers, who currently earn
an average of PKR 2000 per day, would also be relieved of waiting and searching for potential
passengers, and negotiating the fare.
The idea was put through a pilot-test in August 2015. Shahi Sawari started its pilot project from
WAPDA Town, Lahore. WAPDA Town is Defence replicated in a low cost way, opined
Mehras. The team identified the problem of commuters, whose household income was PKR
50,000 75,000 per month, and who primarily commuted on a rickshaw. All of this made sense
to the Shahi Sawari team as they lacked sufficient investment to launch a full-scale project and to
invest in aggressive marketing activities. They also needed to gauge the response from the test
market in order to answer the questions regarding the viability of the service.
Unlike many new businesses that focus on social media marketing in the early stages of the
business, Shahi Sawari chose to turn to conventional means of marketing to reach the maximum
number of potential consumers with minimal investment. Using direct marketing techniques, the
Shahi Sawari team printed pamphlets with the details of the business and personally delivered it
to households in WAPDA Town. By interacting with the residents directly, Shai Sawari was able
to sell the concept really well and it soon started experiencing an increase in volume and
revenue. Moreover, Shahi Sawari also used the rickshaws as a low cost marketing tool by
convincing the drivers to act as agents of the business and by attaching printed flexes on the back
of the rickshaws.
On average, Shahi Sawari was able to provide between five and six rides per day, which reflected
the initial success of the concept. However, as Shahi Sawari was operating on a commission
based model, it still could not raise enough capital to invest in expansion of the business to other
parts of Lahore.

Shahi Sawari The Incubation

As volumes picked up and growth in business was being realized with every passing month, the
founders aspired to expand the scale of operations. The founders approached the LUMS Center
for Entrepreneurship (LCE), which is an independent incubator and is a part of the Suleman
Dawood School of Business (SDSB) at LUMS. It promotes entrepreneurship, welcomes new
ideas, provides seed funding and training to young entrepreneurs.
Shahi Sawari got selected for incubation, received financial resources and the members of the
team received training on how to go about the future of the business. With more resources at
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hand, the team could now work on the expansion project another milestone they wished to
achieve.
Currently, Shahi Sawari offer its services in D.H.A, Askari X, Askari XI, Johar Town, and
WAPDA Town.

The Business Model

Shahi Sawari started its operations with a very clear revenue model for the venture. It would
charge a percentage of fare as commission whenever a rickshaw driver gets directed to a
commuter using Shahi Sawari.
On-boarding:
One of the most important and difficult tasks at hand was to get the rickshaw drivers on board. In
Pakistan, most rickshaw drivers are not literate and are not comfortable using new technology
such as smart phones, applications, websites etc. The members of Shahi Sawari had estimated a
total of 200,000 rickshaws in Lahore (Approximately 2.75 million rickshaws across Karachi,
Lahore, and Rawalpindi). Shahi Sawari, in order to simplify the process, approached the union
leaders and the rickshaw drivers to pitch the idea of consistent revenue mechanism for them in
return for a commission.
Shahi Sawari took only 650 rickshaw drivers on-board after rigorous screening process. It looked
for qualities such as at least some level of literacy, knowledge of different locations of the city,
and willingness to use technology. Moreover, all drivers had to go through a background check
to ensure that the business is able to rely on the drivers and convince the customers that it
provides a secure service. The drivers were all provided with smart phones to ensure that any
demand could be easily directed to the nearest driver by using the tracking system. When there is
no demand, the rickshaw driver is free to search for passengers and not pay any commission on
the revenue earned from these passengers.
So far, only 150 drivers have been actively involved with the operations of Shahi Sawari. The
CEO, Junaid, claims that this depicts a huge gap in the market and a great potential to grow the
business.

Booking a Rickshaw:
Based on the insights gained from the market research, the members of Shahi Sawari found out
that although rickshaws cater to various segments of the society, most college and university
students, and most of the people belonging to SEC C and D are primary users of the rickshaws in
the major cities. In order to create ease of booking a rickshaw for this segment, who may not
have wireless internet service available or who may not be comfortable using an application to
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book a rickshaw, Shahi Sawari introduced a text-based system. However, to ensure that Shahi
Sawari was not perceived as an outdated service provider, it also enabled an online booking
system through its website and allowed consumers to book a rickshaw by calling the call center.
Initial Offering:
Although the team members envisioned an on-call rickshaw service before actually
implementing the idea, after collecting information via the market research, members of Shahi
Sawari acknowledged the fact that a vast majority of people, who do own their private modes of
transport, or who sometimes find themselves short of space to accommodate all the members of
the family, also use the rickshaws as a pick and drop service provider. For instance, people in
many parts of the country search for reliable rickshaw drivers for the pick and drop service of
from home to school for their children as a low cost alternate to sending their children on a van
or school bus. Therefore, both the above-mentioned services were provided by Shahi Sawari.
Shahi Sawari also identified some basic needs of people choosing to avail the above mentioned
services (Exhibit 2) and also analyzed the viability of different channels to attract the consumers
(Exhibit 3).
Market Segmentation:
In addition to segmenting the market based on socio-economic class, according to Shahi Sawari,
the business has three types of consumers which could be segmented as follows:

Consumers who wish to avail a monthly/temporary pick and drop service

Frequent users
Occasional users

Due to the obvious advantages of catering the first two types, these segments were offered lower
rates, discounts and loyalty rewards. Whereas the third segment, which represents a very
insignificant proportion of total business volume, may avail the service at a standard rate of PKR
20 per kilometer.
Current Developments:
In order to remain at par with the industry standards, Shahi Sawari, just like other on-call taxi
services, decided to launch their mobile application for the consumers to book a rickshaw.
However, other strategic decisions were still a matter of grave concern for the team, especially
due to a difference in opinions over certain options available.
Currently, Shahi Sawaris value proposition was as follows:

Reasonable Fares

Safest booking

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Trained, Verified and Professional drivers

24/7 Service - Anytime, Anywhere!

Quicker and Safer Travelling

Industry Dynamics
According to a study conducted by Savaree, a car-pooling service, Pakistans carpooling industry
is worth almost $1.6 billion, with an estimated 7 million people who would be willing to use the
service. The size of the target market was primarily made up of university and college students,
and staff members of many organizations.
The Consumers:
Based on a rough estimate, Shahi Sawari claims that there are approximately 5.3 million people
who commute using rickshaws in the major cities of Pakistan, such as Karachi, Lahore and
Islamabad. Despite the fact that the number of rickshaws are sufficient to serve the people, it is
usually a tedious task to find one at a reasonable fare, especially if the commuter is caught at a
disadvantage. For instance, people who need to find a rickshaw at a location where there is not
much vehicular traffic, may have to submit to the fare demanded by few rickshaws that pass by,
as he or she does not have any other option, other than walking longer distances to save some
money. If we analyze the results from a short survey (Exhibit 4), we could easily identify that
the lower fare and the availability of a rickshaw are two of the major factors which encourages
people to travel using it.
A major proportion of this 5.3 million people, as mentioned earlier, belongs to SEC C and D, and
also students or employed people, especially females. These segments have one thing in common
they cannot afford to pay for a cab if they have to commute using public transport on a regular
basis. However, they still face the problem of finding a rickshaw almost every day and negotiate
the fare from scratch. The inconsistency in the fares prevail due to the reason that rickshaws in
Pakistan do not have a meter installed and the fares are not regulated at all unlike the rickshaws
in India. According to an Indian Public Information portal, Factly, Rickshaw fares are governed
by the states, which decide the minimum and maximum fares while considering various factors
such as inflation, cost of fuel, market demand for rickshaws, etc. Such regulations ensure
uniformity in fares an element missing in Pakistan.
Traditionally, in order to commute hassle-free, the commuters may book a cab at a predetermined rate, which is significantly higher than a rickshaw fare for the same journey. While
on the other hand, in order to limit the travel costs, these segments could opt for buses, which
lacks flexible drop-off and pick-up points.

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Shahi Sawari, after a certain period of operating, observed the following profile of people who
use the service. The result was based on the 100 most recent bookings Shahi Sawari received.

Almost 67% of the customers were either students or employed individuals

Almost 67% of the customers were females
Customer age group: Between 20 and 35 years
Highly likely to have active presence on social media

The Suppliers:
The rickshaw drivers, who are the suppliers of the service provided by Shahi Sawari, can be
found all across Lahore. As mentioned earlier, out of the 200,000 rickshaws in Lahore, Shahi
Sawari has only taken 650 (approx.) on-board (Exhibit 5) and there is still room for increasing
this number and the revenue earned through commissions at the same time.
Unlike the popular notion that all rickshaw drivers may not be literate, there are many who can
read and write, and use smart phones. Moreover, there are many rickshaw drivers who are not
part of a union, which makes it easy for Shahi Sawari to approach those who are willing to work
for it. There is clearly an abundance of supply, most of which are not operating through any
formal channel. Shahi Sawari can benefit from this if it is able to convince more and more
rickshaw drivers to register as official Shahi Sawari agents.
On the other hand, Shahi Sawari is a business which demands a certain level of commitment
from the rickshaw drivers, whereas a majority of rickshaw drivers are either fond of working
independently, or are not comfortable with changing the way they operate. Those who eventually
opt to register with Shahi Sawari, are not obliged to only respond to demands raised by Shahi
Sawaris customers.
Such dynamics of the supply side gives a certain degree of negotiating power to both sides.
Available Substitutes:
Lahore has recently experienced a rapidly changing public transport system and an improvement
in the road network. These factors have surely created ease for commuters by providing them
with various options to choose from.
One of the major substitutes is the Metro Bus Service in Lahore, which caters to thousands of
people every day. Its low cost of travelling long distances conveniently has attracted many
people, especially those who would otherwise have to suffer in traffic or incur a higher cost of
travelling. The fact that Shahi Sawari aims to cater to consumers who primarily travel on
rickshaw and are not very likely to commute on Metro Bus, residents of D.H.A for instance, does
not impact the volume of business Shahi Sawari could potentially get from its target market.
However, those customers who have an easy access to Metro Bus, and who need to travel to
places on the bus routes, are more likely to switch to using the bus service. Lahore Transport

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Company (LTC), is another substitute public transport service provider, which operates buses
across the city.
In addition to the public transport system, several other businesses have started operating within
the transportation industry in order to benefit from the improved road networks, major
investment in infrastructure, and an increase in demand for efficient transport services. Some of
these private businesses are not only substitutes of Shahi Sawari, but are also close competitors
of it.
An indirect substitute of Shahi Sawari also exist in the form of privately owned vehicles.
Although Shahi Sawari has little control over the ownership of private vehicles, it does not pose
a great threat to the business as the target market of Shahi Sawari is less likely to substantially
increase its ownership of vehicles.
Lastly, one of the projects in-progress, the Orange Line mass transit service in Lahore, will be
another substitute for Shahi Sawari. However, the project will take time to complete and become
fully operational.
The competitors:
Over the past three years, the on-call taxi service industry has witnessed the influx of many new
businesses. Young entrepreneurs, who have the vision and willingness to transform the dynamics
of the public transport market and capitalize on the gap, are putting their ideas into action.
Following are some of the examples:
Travly
One of the closest competitors of Shahi Sawari is Travly, which is a Lahore-based start-up
incubated at Plan9. It was a business prospect proposed by Beaconhouse National University
(BNU). With the aim of providing one stop solution for all the travel and transportation related
demands of the people, Travly initially catered to the needs of people who travel on bus. In
Lahore, there are almost 1100 bus stops and Lahore Transport Company (LTC) is one of the
largest service providers. Travly digitalized all the information needed by commuters so that the
information regarding the arrival time and routes of different LTC buses could easily be
monitored.
After gaining popularity to a great extent, Travly graduated to PlanX, which is the largest
accelerator of technology based businesses in Pakistan. This led to Travlys expansion into the
rickshaw services in the October 2015. Travly introduced Tuk Tuk, which then entered into
direct competition with Shahi Sawari by providing similar on-call rickshaw service.
In comparison to Shahi Sawari, Travly has more experienced personnel. Moreover, with the
support in the form of training received through incubators such as Plan9 and PlanX, Travly was
able to introduce the rickshaw service and expand it aggressively. Travlys rickshaw service was
available in Lahore and Karachi initially (Exhibit 6) However, according to a recent inquiry,
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Travly has informed that it has stopped covering Karachi, for now, due to very low fares. Despite
the discontinuation of the service, the area covered by Travly is far greater than what Shahi
Sawari covers at the moment. Such factors are very important for consumers who wish to
develop a regular transactional relationship with a service and not switch between service
providers very often.
As far as pricing strategy of Travly is concerned, it offers competitive pricing and also offers
occasional promos. One such example is the promotion for Pokmon GO fans, who can travel at
PKR 12 per kilometer for 10 kilometers on Travlys Tuk Tuk. The revenue model, however, is
the same as Shahi Sawaris, whereby Travly charges a small percentage of the fare as
commission from the drivers.
Unlike Shahi Sawari, Travly tapped the market with a mobile application, in addition to the
booking facility via website or phone call.
With many blogs labelling Travlys Tuk Tuk as the Uber of Pakistan, it is highly likely to
attract the attention of many consumers across different cities easily. Moreover, with the
introduction of Travly Logistics Solution, Travly has diversified its product portfolio even further
and is marking its footprint on many different segments of the industry across Pakistan.
Currently, Travly has around 500 rickshaws registered and is operating at around 110 rides per
day.

GO Rickshaw
This service is the most recent addition to the list of businesses in Pakistan that offer on-call
rickshaw service. However, unlike Shahi Sawari and Travly, this business originates from the
largest city of Pakistan Karachi.
Karachi is a city where people have suffered a lot due to security concerns. Travelling on any
form of transport poses some sort of security risk for the commuter with regards to incidents of
mugging. For those who travel usually on public transport such as rickshaws and buses, the
problems do not end with security risks only. There is a lot of inconvenience involved in finding
a rickshaw and negotiating a fare, and travelling on bus is one of the most painful experiences for
those who cannot afford to travel on rickshaws every day or own their means of transportation.
These problems are worse for females, who also need to worry about possible harassment
incidents.
GO Rickshaws value proposition lies in the fact that it promises a safer and more convenient
way of booking a rickshaw by registering NADRA verified drivers only, and by charging very
low rates per kilometer.

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GO Rickshaw aims to target a similar market as targeted by Shahi Sawari in Lahore. The service
seems to be very similar to Shahi Sawaris, and is offered at competitive prices. Users of GO
Rickshaw currently pay PKR 15 per kilometer, and an additional PKR 20 for every 15 minutes of
waiting time. For those who travel regularly on a rickshaw, GO Rickshaw has introduced a
monthly package at a reasonable rate.
With a mobile application and online booking feature, GO Rickshaw operates in a similar
manner as do its competitors. Shahi Sawari must not discard GO Rickshaw as potential threat to
its business in Lahore due to the ease of replicating the model.
Although the service is becoming popular, its social media page is filled with complaints and
negative remarks about the reliability of the service due to the time delays and poor customer
service.

Rixi
Adnan Khawaja, the CEO of Rixi, an on-demand rickshaw service by Ideacentricity, started the
venture in 2013. This is one of the largest service providers in terms of number of rickshaw
drivers on board with more than 10,000 rickshaws.
Rixi positions itself as the lowest cost provider of the on-call rickshaw service. Its confidence
reflects from the fact that it promises a refund to the customer if they can prove to have received
a lower rate from any other service provider.
Rixis founder, Adnan, aspired to uplift the living standards of the rickshaw drivers in Pakistan
by providing them with a consistent amount of revenue each day. He realized that currently, their
income is very inconsistent and unpredictable, which makes their living conditions even worse at
times. Therefore, with a promise of at least three clients per day in return for a commission of
8% on all transactions in a month, Rixi was able to appeal to a large number of rickshaw drivers,
who could also search for more clients if they are not engaged by Rixis customers.
One of the barriers identified by Adnan was the use of technology by the rickshaw drivers.
Despite the introduction of high speed internet and smart phones, Adnan believed that Rickshaw
drivers are not very tech-savvy, and in order to attract as many rickshaw drivers as possible, there
needs to be a common mechanism of booking a rickshaw without the need to own a smart phone
by either the client or the rickshaw driver. Thus, Rixi incorporated an SMS based process to book
a rickshaw which works as follows:
1.
2.
3.
4.

Send SMS to 8001 with your pickup and destination addresses separated by *
Alerts are sent on the phone with a compilation of bids to choose from.
Reply with the option number
Deal confirmation message is sent to the passenger

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Rixi promises the clients that a bid would be received by them within three to five minutes. If
not, there is a 50% discount offered on all bids to the client as a way to compensate them for
waiting long enough. All bids are valid for eight minutes after which the offers expire.
In addition to the SMS based booking process, customers can also visit Rixis website and book
a rickshaw using the online booking option. It must be noted though, that despite being one of
the oldest service providers of its sort in Pakistan, Rixi has not yet launched an application,
which shows its confidence in the current system and its focus. Unlike many new businesses,
which replicate its competitors services, Rixi has shown commitment to its standard operating
procedures.
After certain period of operations, Rixi did not earn a lot of revenue based on its commission
based model in order to finance its expansion projects. Adnan came up with the idea to introduce
Rixi Adz, which would allow brands to advertise on rickshaws serving Rixi in return for a
monthly fee. These advertisements have been very catchy and are generating a good amount of
revenue for the business.
In contrast to all other service providers directly in competition with Rixi, it has remained
focused and has specialized in providing just one service via specialized channels only.
Currently, Rixi has 1000 rickshaws on board (Lahore), and operates at almost 100 riders per day.
Rickshaw Drivers
Despite many service providers now taking the rickshaw drivers on board, there still remain a
huge proportion of rickshaw drivers who are working independent of any business organization.
They are very much in direct competition with Shahi Sawari.
However, with an average idle time of 6 hours per day, these rickshaw drivers are at a
disadvantage when it comes to comparison with those who are registered drivers of an on-call
rickshaw service providers.

Careem
The U.A.E based on-demand taxi service ventured into Pakistan in May 2015. Within no time,
Careem became a popular taxi service in Pakistan, especially in Lahore and Karachi, with the
introduction of its promo codes, discounted prices, and better service. Careem entered the
Pakistani market with an aggressive marketing strategy, which is reflected from its activities over
social media.
Careem initially targeted people from SEC A and B who are in need of conveyance options, and
are not comfortable to travel using public transport due to various factors. The target market was
one which would not use a rickshaw or a bus otherwise as it may reflect poorly upon their social
status, or due to certain security concerns. Based on the characteristics of its target market,
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Careem launched its service with a pricing mechanism (Exhibit 7) which made it seem
expensive for the people belonging to lower SECs, and to students, unless they were sharing the
ride.
Careem initially offered the following value proposition:

Safe and reliable service

Affordable prices with comfortable rides
Special offers pick and drop services to airport (the fare is waived off if the cab is late
by more than 5 minutes)
Loyalty rewards in the form of discounts
Four booking options: Now, later, repeat and Careem Click. Careem Click allowed
customers to earn a commission for booking a cab for someone else.

Careem soon realized that there is a great potential in the market for such on-call taxi services
due to lack of safe and reliable means of transport, especially for those who do not own a
vehicle. Moreover, the increasing popularity of the service, especially among the university
students of the urban centers (females in particular), where students would share the cab with
their friends to go around to places with the comfort of an air-conditioned car and well-behaved
driver.
Within one year of operations, Careem introduced its economy cars, which would charge a lower
rate per kilometre (Exhibit 7), enabling the customers to experience a reduction in fare by at
least 25% of the standard fare. The economy service, however, could only be availed for a
certain Japanese and locally manufactured cars, which were not as luxurious as the cars offered
under the standard service.
We are very excited to launch economy cars in Pakistan, as this will provide another option for
people to utilize our service at economical rates. said Managing Director Junaid Iqbal. This is
yet another step to revolutionize the transportation sector and serve the people of Pakistan.
Careem capitalized on the fact that most rent-a-car services in Pakistan, and most owners of cars,
usually have their assets under-utilized, which is basically an inefficient use of the resources.
Careem offered these rent-a-car services and private car owners, an opportunity to make extra
money by lending their services to Careem and by providing pick and drop services to its
customers, who would book a cab using the mobile application or the website.
In order to further strengthen its operations in Pakistan, Careem acquired 100% shares of
Savaree, a local car-pooling service launched in Lahore by Madeeha Hassan in April 2014.
Savaree was a product of the sharing economy, whereby people often rent out things they do
not use very frequently. Just like Careem did, Savaree also identified unused cars owned by
many rent-a-car services and households.

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Savaree was the first company in Pakistan to have initiated carpooling, followed by Tripda and
many others. All users, the suppliers and consumers, were required to enter their National
Identity Card number on the application in order to waive off the security concerns, while the
consumers were given the option to take a personal or shared ride. The process of booking a ride
was pretty simple and easy for any consumer who owned a smart phone and had installed the
Savaree application (Exhibit 8).
With just over a couple of years of operation, Savaree had set up a good network of car providers
and users. Careem, which was making a great name for itself since its introduction in 2015,
eventually acquired 100% shares of Savaree in 2016 in order to benefit from a bigger network of
car providers, and from the experience of Madeeha Hassan, who now works with the leadership
of Careem in Pakistan.
Thus, with the acquisition of Savaree, introduction of economy-car services, partnership with
different start-ups like Food Panda to give away as much as 1000 free rides and the use of promo
codes, Careem was consistently taking steps to take away the market of Shahi Sawari.
However, it must be noted that although some consumer segments may overlap, the primary
target market of both, Shahi Sawari and Careem, are different. People who travel on rickshaw
very often, do so because of the lower fares of rickshaws. For instance, if a rickshaw booked
through Shahi Sawari costs PKR 100 to travel from point A to B, whereas Careem charges PKR
180 for the same distance, one may still vouch for Shahi Sawari because the cab ride costs 80%
more. Careems economy service, which charges almost PKR 17 per kilometer (Exhibit 7), in
addition to other service charges, would eventually eliminate the PKR 3 per kilometer difference
versus Shahi Sawaris fare.
Careem is actively considering to launch its rickshaw service soon, according to Junaid
(Managing Director at Careem).
Uber
One of the pioneers in the on-call taxi service industry, Uber is currently a market leader with its
footprint across 60 countries now. Since its inception in 2009, amidst the financial crunch, Uber
has redefined the sharing economy when it comes to cab services, and its disruptive innovation
has benefitted many. However, at the same time, it has attracted a lot of resentment from the taxi
drivers in many developed economies.
Uber launched its services in Pakistan in March 2016, by using the same marketing strategy as of
Careems and with an average rate of PKR 13.7 per kilometer (Exhibit 7), which is far lower
than the fares charged by any other service provider in Pakistan. With its promo codes and
discounts, and its extra ordinary brand image
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However, Ubers condition of minimum fare (PKR 150), per minute charges, and the base fare
Uber fails to threaten Shahi Sawaris business as it only appeals to those who are willing to pay
for the convenience and comfort, and are not price sensitive. Thus, Shahi Sawari, although not
under immediate threat, must be vary of this competition for the following reasons:

Uber has already launched UberAuto in India, which clearly shows that the business can
do the same in Pakistan. The rates would then be very competitive.

Currently, there is no economy service offered by Uber like that offered by its close
competitor Careem. If Uber chooses to launch economy services in future, this could
attract many customers

It has the financial muscle to compete with the recently established services if it comes
down to price competition

Shahi Sawaris CEO, Junaid, is not wrong if he worries more about Uber than any other
competitor around. A plan must be made right now if Shahi Sawari does not want to be surprised
by any innovative moves by either of its competitors.

Deciding the Future of Shahi Sawari

One of the most common measure of a businesss success in todays world is the rate of growth
in business revenue and/or volume. Shahi Sawari currently faces great competition from the
above-mentioned competitors and substitutes of its service.
Shahi Sawari must make informed strategic decisions without falling prey to the negative aspects
of growth pressure. This leaves the leadership with many options to consider and determine the
future of the business. However, with the current financial position and the available resources,
Shahi Sawari cannot choose to invest time and money on all or most of the options. The strategic
decisions should be made soon.
By April 2016, Shahi Sawari was earning above PKR 200,000 per month in revenue. Although
the co-founders agreed upon growing the business in a sustainable manner, there were some
disagreements when it came to evaluating different growth options. Without any financial
assistance, unlike most other competitors, Shahi Sawaris co-founders intended to safeguard their
investments from personal savings.
Geographical Extension:

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With over one and a half years of operations, Shahi Sawari has successfully made a mark certain
areas of Lahore. However, as mentioned earlier, the service is not provided in most areas due to
restricted supply, inability to get rickshaw drivers on board, or due to the area being an
infeasible option for the type of service Shahi Sawari offers.
Shahi Sawari could, therefore, grow the size of its business by either increasing the depth or by
widening the breadth of its geographical reach.
A. The Depth: Increasing the depth while considering geographical expansion basically
means to increase the area coverage within the existing market. Thus, one such expansion
could be offering the service in the vicinity of Bahria Town. Mehras is particularly in
favor of this strategy as he believes in earning a bigger share of the existing market. Due
to constraints in time, money and manpower, it is wise to use the resources effectively in
the existing markets and grow the business in home territory first. Mehras believed that
with only 650 rickshaw drivers (out of 200,000) on board is not a good enough
achievement as far as sustainable growth is considered and that there was a lot of room
for growing the business by staying in the comfort zone.
According to this growth strategy, Shahi Sawari would have to launch its service in other
areas within Lahore. In some cases, it might also have to modify its offering in order to
cater to the demands of the people living in different areas. Mehras, for instance,
observes, that people in under-developed and old parts of the city may not be very
particular about premium services. Instead, this segment would demand an even lowercost service as their willingness to pay for extra services such as well-trained drivers is
not very significant. Differences in socio-economic factors across different areas of
Lahore will have to considered, which may increase the complexity of operations.
B. The Breadth: Widening the breadth of its geographical reach would mean that Shahi
Sawari will expand its operations in different cities and towns of Pakistan. Some of the
most appealing cities in this regard are Karachi, Islamabad, Rawalpindi, Multan and
Faisalabad.
We want to replicate our business model into other cities but we do not know its
feasibility Junaid, CEO Shahi Sawari
There is a vast majority of people living in these cities who belong to SEC C and D and
match the profile of the target audience of Shahi Sawari. Moreover, the presence of Shahi
Sawaris competitors in these cities, especially Karachi, makes sense for Shahi Sawari to
aim for earning a reasonable market share by competing outside Lahore as well.
However, care must be taken due to certain differences in social factors across different
cities. As mentioned earlier, Travly abandoned its operations in Karachi temporarily due
to lower fares, which it may have thought to be the same as in Lahore. Shahi Sawari,

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unlike Travly, does not have financial assistance from international sources, and thus it is
riskier for Shahi Sawari to experiment on such a grand scale.
Moreover, despite the existence of people belonging to the SECs catered by Shahi
Sawari, other factors will greatly influence the behavior of people across different cities.
For instance, in Karachi, people may not be very comfortable to use their smart phones
on booking a rickshaw knowing that they will be more prone to the risk of getting
mugged.
Therefore, expanding its business by using the needs-based positioning, could be one of the ways
to achieve long term growth in revenue, but it is also one of the most risky strategies if the team
opts to expand outside Lahore. This positioning strategy will help Shahi Sawari to offer services
based on the needs to the particular segments it caters to.
Product Extension:
One of the few options under consideration was to introduce new services under the same brand
name which would help Shahi Sawari widen its scope and also allow it to compete well against
other services. Of all the ways Shahi Sawari could execute this strategy, the leadership was
considering the introduction of Shahi Sawaris delivery system or the advertising services.
A. Delivery services: Shahi Sawari was convinced that if it offers ancillary services along
with on-call rickshaw service, it could attract more customers and appeal to the masses.
Although a spin-off of the concept of roadrunners, the leadership was convinced that it
may help the business grow sustainably.
Shahi Sawari was considering the delivery of grocery items to the door-step of people
who placed an order. It believed that such as service will not only diversify the product
portfolio, but also help Shahi Sawari serve its suppliers with more volume and hence
develop a stronger business relationship with them.
B. Advertising services: Introduction of this service using the growth strategy being
considered, Shahi Sawari would allow other businesses to place advertisements on the
back of the rickshaws in return for an advertising fee. This could help Shahi Sawari grow
its revenue sustainably without significantly complicating its processes.
Close observation of these options would reveal that option A is actually going to make Shahi
Sawari replicate what Travly is already doing, while option B is an adaptation of Rixi Adz.
Although both the options have possible benefits, option A would complicate Shahi Sawaris
logistics and supplier relationships, while option B may cause the leaders to lose focus on the
core business in pursuit of revenue from advertisements.
Pricing Strategy:

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Another strategy under consideration is the revision of pricing strategies used by Shahi Sawari.
According to the leadership, the business could introduce a tiered pricing system, whereby
consumers would be able to pay a higher or lower fare depending upon the quality of rickshaws,
driver ratings, time of day, etc. This pricing mechanism is currently being practiced by Travly.
Although this may seem similar to offering an economy service offered by Careem, which
charges a lower amount due to the provision of Japanese or locally manufactured cars, such a
strategy is going to eliminate consistency in the fares a value proposition of Shahi Sawari.
Therefore, by implementing this pricing model, Shahi Sawari would impact its positioning
which may or may not turn out in its favor.
This strategy, just like the product extension strategies, is one form of replicating the competitors
offering. According to Porter, it may dilute a businesss unique position if the consumers
perceive it as a me too business.
Vertical Integration:
Vertical integration strategy is one of the most expensive options under consideration by Shahi
Sawari. With an average price of a second-hand rickshaw being close PKR 100,000, Shahi
Sawari had the option to own rickshaws and hire drivers who would work only for Shahi Sawari.
This would enable the business to control the supply side to a great extent, serve more customers
by ensuring availability, and earn higher revenues as it would not earn only a small portion of the
fare in the form of commissions.
Shahi Sawari has the expertise of dealing with rickshaw drivers and this strategy would not
create significant complications in the existing processes. However, such an investment would
only create a significant impact on business growth rates if the rickshaws are purchased in good
quantity a venture which will cost Shahi Sawari a lot of money.
The Future
All of the above-mentioned strategies are under consideration at the moment. With the mobile
application almost out in the market, Shahi Sawari now has to think about the future of the
business and make informed strategic decisions in order to compete better and grow.
The team is currently evaluating the cost and benefits of every option, however, the quantitative
analysis is rather complicated. They have all agreed to base the decision not only on the
qualitative factors and their gut-feeling, but also the assign a significant weight to the financial
feasibility of the options (Exhibits 10-13).

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Exhibits

Exhibit 1: Commuters Pain Points

Exhibit 2: Understanding the Needs

Consumer Types
On the Go
Commuters

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Fixed up the
Service

Exhibit 3: Viability of Distribution Channels

Distribution Channels

Adaptabi
lity
issues
Slower
Respons
e
Transacti
on
Processi
Operatin
g
Bottlene

Apps
Web
SMS
C
al
l

Exhibit 4: Most Compelling Features of a Rickshaw According to Consumers

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Highest
Margin,
Lowest
Highest
Margin,
Lowest
Low
Margin,
High
Lowest
Margin,
Highest

Exhibit 5: Number of Rickshaws Registered (2016)

Exhibit 6: Areas Covered by Travly

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Exhibit 7: Fares (per 10 KM)

Exhibit 8: Booking a Ride - Savaree

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Exhibit 9: Market Size (Karachi, Lahore, Islamabad)

Total
Population
23.5 Million
in Lahore,

Karachi & Rawalpindi

Middle
Income Class

8.2 Million

Daily
Rickshaw

5.75 Million

Sources: PIDE, Index Mundi, Literature Review

5 to 6
Hours
Idle

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2.5 Million Auto

Drivers across
Major Cities

5.75
Million
Daily Auto

- 300 Fuel
wastage

Daily
Average
Income

> 1700

Exhibit 10: Financial Structure (Shahi Sawari)

Exhibit 11: Population Demographics of Karachi, Lahore and Rawalpindi

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Exhibit 12: Vertical Integration

Exhibit 13: Statistics Education Sector Institutions and Enrollment by Type

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EducationStatistics- InstiutionsandEnrollment at District Level

Karachi
Lahore
Rawalpindi
Institutions Males Females Total Enrollment Institutions Males Females Total Enrollment Institutions Males Females Total Enrollment
468
25,041 36,873
61,914
331
41,786 51,235
93,021
356
27,908 25,839
53,747
28
2,504 1,370
3,874
24
1,323
4,338
5,661
39
2,017
2,472
4,489
496
27,545 38,243
65,788
355
43,109 55,573
98,682
395
29,925 28,311
58,236

Source: District Education Profle 2014-15by AEPAM

HighSchools
Higher Secondary
Total

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