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Bykea - Ride Hailing and Logistics Service
Based upon unique principles, Bykea is a ride-hailing and logistics service aiming to address challenges in the transportation, logistics and payments sector.
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Bykea is a technology company that provides instant transport and courier services. It aims to bring affordable ride-hailing and parcel delivery to regions where car bookings might be expensive for customers. It also aims to solve the problem of congested cities, via two assets – bicycles or motorbikes and smartphones – which the population’s majority owns in the cities Bykea operates within.
It was founded in 2016 with headquarters in Karachi, Pakistan. To date, it has raised $18.7M in funding with the most recent round a $13m Series A in September 2020. It currently operates in 3 cities: Karachi, Lahore and Rawalpindi.
Business Overview and Products
Bykea provides an all-in-one app for transportation, logistics and cash on delivery payments. It offers 4 core services: Bykea Ride, Bykea Commerce, Bykea Payments, and Bykea for Business. All of these are available as options within the Bykea App.
Its services help move people, parcels and payments efficiently in a reliable and inexpensive way. It utilizes bikes as modes of transport which outnumbers cars by 3 times in Pakistan. It gets through cities’ congested streets and narrow alleyways faster than a rickshaw or car. Moreover, Bykea has partnered with clinics to provide fast, on-demand first aid staff to individuals in need. It has also partnered with pharmacies to help deliver over-the-counter medicine to those with no access.
The app has a strong ratings system for both customers and driver partners. Customers can rate driver partners on safety, hygiene, behavior and much more. Meanwhile driver partners are licensed and GPS tracked to ensure customer safety.
How It Works
Bykea utilizes smartphones and motorbikes to enable business. For Bykea Ride, a customer may simply open the app, provide pickup details, ride to their desired destination and pay at the end via cash or in-app wallet. For Bykea Commerce, the driver picks up any order placed and delivers them to customers after details are entered via the app. In a similar fashion, for Bykea Payments a customer may send or request payment from anyone by choosing the appropriate option in the app, and this way transactions may be processed. Finally, Bykea for Business allows small businesses to deliver any shipments they want.
For people who do not own smartphones, they may simply book the service by calling one of their call centers. A customer services representative connects them to the closest available Bykea. All vehicles are inspected to ensure quality of experience and a helmet is offered to each passenger and a driver-partner upon starting a ride.
Payments are made easy by allowing customers to pay in cash for each booking and to top up an in-app wallet for non-cash payments. Upon each booking, customers can track the driver’s estimated time of arrival and locate their precise GPS location at all times within the app.
Business Model and Pricing
Bykea uses transparent pricing. In regions where metered pricing is often ignored, Bykea ensures that customers get a clear itemized price. According to a source, Bykea charges a base fare of PKR 30, and additional charges are added on as PKR 4 per kilometer. To the base fare, time charges are also added, which are only PKR 1 per minute. The complete charges of the ride are calculated by adding the distance traveled in kilometers.
Driver partners at Bykea can choose the number of hours they want to log working for the company, which allows them a certain flexibility. According to a local Pakistani source, Bykea charges a commission of 20% from the earnings that driver partners make.
For Bykea Payments, the company charges PKR 70 as a flat fee for any transactions it initiates on behalf of users. This fee is charged in relation to the partnership Bykea has with utility companies, banks, and the companies behind mobile wallets.
Bykea was named among the 10 tech startups with highest valuations in Pakistan in 2020.
Bykea’s core product offerings include ride-hailing and deliveries, which account for more than 80% of the company’s revenue.
In February 2020 before the coronavirus pandemic, Bykea had a fleet of 33,000 monthly active bike drivers. According to a source, the company plans on cross-utilising this active driver fleet for e-commerce logistics, food and payment services.
The company plans to have partnerships with 1Link for payments in an attempt to automate payments via direct banking channels to keep their services cost-efficient.
Bykea also serves as a hyper-local marketplace, and in the first 17 months of operations it had 7 million transactions.
Founder(s) & Team
Muneeb Maayr [LinkedIn]: Founder and CEO of Bykea. Previously, Maayr has served as Co-Founder and CEO at Daraz.pk for 4 years, Pakistan's largest e-commerce platform acquired by the Alibaba Group.
History and Evolution
Bykea was founded in 2016 and is headquartered in Karachi. It was launched based on 3 basic principles. Firstly, the company wanted to take existing technology and make it relevant to the Pakistani population. Secondly, it aimed to convert the existing possessions of people (i.e. motorbikes and smartphones into income generating assets). Lastly, it wanted to solve the transport problem in the three major cities of Pakistan, which include Karachi, Lahore and Rawalpindi/Islamabad.
Since then Bykea expanded to Lahore and Rawalpindi. In 2018, Bykea partnered with a Pakistani digital communications company called Jazz to enhance digital connectivity and efficiency to users. It also formed a collaboration with Mahvash and Jahangir Siddiqui Foundation (MJSF) for a Bikers Support Scheme. The company received its first funding in 2019.
Within two and a half years of operations, Bykea grew to become a big platform and managed to connect 200,000 motorcycle riders to its 2 million users. During the pandemic, it faced a loss as 90% of its business depended on pillion riding and the Pakistani government had placed a ban on it. Bykea has been lobbying to have the ban removed as they claim to follow pandemic safety protocols. According to Bykea, its motorbike riders wore helmets that serve as health visors, and ride in open air with gloves and face masks on.
In its rather short operating history, Bykea has swiftly expanded to new domains, offering a variety of services. These include Bykea Commerce, Bykea Payments and Bykea for Business.
Bykea has been modeled after an Indonesian startup known as Go-Jek. Its growth trajectory is often compared to Go-Jek as well.
As Bykea is able to take advantage of lower fuel consumption and maintenance costs, it can offer much cheaper rates than conventional taxis or rickshaws.
During the pandemic, the government of Pakistan put a ban on pillion riding to curb the spread of the virus. According to Bykea, an incoming investment of $13M was on hold due investor paranoia on investing in a category that the government of Pakistan continues to suspend.
Bykea is the only app in Urdu that Pakistan’s middle class uses for affordable transport.
Bykea operates with a focus on creating positive social impact.
Bykea introduced its services at a time when no one had been able to penetrate a significant portion of the market. In a country of 200 million people, the market size was estimated around 50 million smartphones and 100 million people using feature phones.
It competes against Careem Bike and UberMoto in the regions it operates in. The founder credits Uber and Careem for developing the space for this business: “when Careem entered the motorcycle space, we grew as opposed to shrinking [...] because they had marketed bikes as an option.”
Suggested Next Reads
To get deeper insights into the company, the following readings would be a good starting point:
Is Bykea the first (next?) Pakistani unicorn in the making? (PT Profit, May ‘16)
Is Bykea a candidate for the Pakistani super-app? (PT Profit, November ‘20)