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:
1. Transportation Sector (Uber and Careem in Pakistan)
2. Retail Sector ( Daraz.pk, Alibaba, Telemart etc)
3. 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 ?

 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?