An app to rent a car by the hour -
Pakistan Press Foundation

An app to rent a car by the hour

Pakistan Press Foundation

Anyone who doesn’t own a vehicle knows how anxiety-inducing it is to think about running all those errands, the stops and the route to be taken so you pay the lowest fare. And with car prices through the roof, what can you do? Enter Roamer and it might just get a bit more convenient.

Roamer is an Islamabad-based mobility startup that rents you cars by the hour, giving a fixed rate ahead of the ride depending on your specifications with no fuel, distance or peak charges.

Download the app, sign up, enter your location, select intra or intercity option, type of car, duration required, date and time etc. With each alteration, it will give you an updated flat price.

The app offers three categories to choose from: high-end Sedans, mid-range Compact with the likes of Cultus, Swift etc and Mini that includes Mehran and Alto.

When the driver arrives, pay at the start of the trip. At the moment, cash is the only acceptable mode of payment but the startup is trying to integrate other electronic channels like wallets and bank cards.

The base hourly fare starts from Rs460 for Mini and goes up to Rs700 for Sedans. For every subsequent hour, the additional cost is somewhere between the range of Rs270 and Rs430. Their own revenues come from charging a certain commission on the total earnings of the supplier, as is typical in pretty much all shared economy models.

The duo also closed a small seed round from a network of private investors earlier this month and plans to use the bulk of that towards marketing.

With consumer angle addressed, let’s turn our attention towards the supply side. Roamer has this Uberised network of car owners and drivers who list their vehicles on the platform to make an extra buck on the side. For those who don’t have a car and want to sign up are linked up with those who do, with the terms of engagement left for the two parties to decide between themselves.

Offering both intra and intercity services, does Roamer have a core offering? “I wouldn’t really call one or the other our primary offering but based on usage, there is obviously greater volume for within city and a more recurring demand. On the other hand, outstation has bigger ticket size, which makes it quite lucrative too,” Chief Technology Officer Ali Moeen says.

Let’s get to the point all of us have in mind: how does one even plan to stay in the game when there is fierce competition from few of the best-funded global and regional companies? “Ride-hailing is more about point-to-point while our model offers flexibility to take detours and not having to worry about waiting charge or the peak factor,” explains Chief Executive Officer Muhammad Hadi.

Okay forget ride-hailing, what about traditional rental companies such as Hertz among foreign and Vintage in the local ones? “The current industry is quite mispriced and fragmented, with hardly any usage of technology and actually has its focus on the corporate customers. We, on the other hand, are addressing the wider mobility problems in the business-to-consumer segment,” he goes on.

Fine, put aside the conventional players too but what about new startups like that operate on a gig economy model in a managed marketplace. How does Roamer set itself apart from them?

“I think theirs is more about tapping on the existing car rental pie – usually the corporate – while we are trying to expand the size of the market by offering this new model,” Hadi explains.

In any case, Roamer does chauffeured short-term rentals (at least 20 minutes) and charges by the hour while the other works on a longer-term with price calculated for the entire day.

The startup was founded by childhood friends Mohammad Hadi – a banker who has worked around the world in big names like Citi and Credit Suisse – and Ali Moeen, who had been running a software development company in Islamabad for over a decade. “We thought there was a great opportunity in the local entrepreneurial space and came across some companies in emerging markets that were solving mobility problems through rental, which prompted us to start our own journey,” recalls Hadi.

They piloted in July 2018 and later became part of both the National Incubation Centre, Islamabad and invest2innovate accelerator programme.

Given the sheer lack of public transportation options in Pakistan and burgeoning urban population, many startups have attempted to enter the mobility space, each with its own model, usually with heavily discounted fares to quickly grab a market share.

But since the disappointing post-IPO performance of Uber and the entire WeWork fiasco, questions have arisen over the viability of this industry as a whole. Then the macro factors such as massive devaluation of the rupee or record-high fuel prices further dented players’ ability to offer affordable competitive rates. How does Roamer plan to tread this path?

“Our focus from day one has been to ensure the unit economics is sound and we charge a price that is sustainable for business too,” says Hadi. “Obviously when it comes to oil rates and the currency markets where we exercise no control, we have to raise fares and pass the burden to customer as well,” Moeen says.

The writer is member of staff:

Twitter: @MutaherKhan