Pathao

The case deals with the operational problems of Pathao, one of the most successful rides sharing
companies of Bangladesh. It was established by three impressive and talented individuals-
Hussain M. Elius, Fahim Saleh and Adnan Shifat in 2015 as a delivery service provider and
became the fastest growing company in Bangladesh with in a shortest of time. They experienced
an exponential progress during late 2017 to mid-2018 and made their position on Forbes 30.

Pathao generally concern with two areas—delivery and logistics service; and motorbike taxi
service. By establishing its operation throughout the country Pathao able to differentiate itself
from competitors by implementing innovative ideas. The customer responsive ride sharing
service has already taken over the taxi and CNG services.

Pathao introduced their motor bike sharing service in 2016 and in 2019 they came up with their
food delivery services as a part of their exponential growing. Although they experienced an
immense profit in the starting of the business, they need to lay off their employees last year
because of their operational failure. Customer satisfaction is the main concern of any kind of
business which can be achieve through a satisfied employee base. Pathao is also not an
exception. Thus, in order to satisfy the clients, they are required to overcome the operational
problems and improve the efficiency of their services.

Company History:

Pathao was established with a moto of continue growth and earnings by solving the traffic jam
problems of Dhaka city. They provide their employees and customers a new experience of
transport and delivery system. The company started its operation by establishing bike sharing
services. Later on, by understanding the growing demand of the customers and to compete with
its other competitors they came up with their other services like car hiring service, food and
parcel delivery. Their aim is to provide not only the widespread service to its unique customers
but also create skilled workforce. Currently more than 500+ drivers are working with Pathao as
permanent or temporary basis and other than that they have other staffs for helping to run their
operations.
How they work

Pathao was started its operation as a parcel delivery service by motor bike in 2015. In October
2016 they introduced their ride sharing service by using motor bikes. They also have food
delivery business. Their operation is basically depending on mobile apps. Whenever a person in
need of a ride, he/she send pick up request through the app and then meet the rider at destination
point. Or if any one need to parcel any thing or want to order food they can also the same apps.
The charge or fare for using the service is fixed by the company based on their competitors’
price and its is automatically calculated by the mobile app depends on the destinations.

Market Segment

Pathao is offering its services to both male and female customers of Bangladesh. They usually
providing their services in all major cities of the country. Their target is to provide services to all
the people who needed the service.

Major challenges for running the operation in Bangladesh

Pathao is a fastest growing business of Bangladesh. But being as a fast mover in the industry
they did not able to take the full advantages of the first mover due to some of the limitation in
their operational strategies. They employed a large number of employees in each individual
operation rather using an employee in multiple task. Again, for creating a good brand image over
the other competitors like Uber, Sohoz & Obhai they use excessive cost on branding. Their
obscene expanse on promotion, including around 2 Crore BTD worth TVC and additional BDT
1.5 Crore on Bongo Bondhu Premier League sponsorships and campaigns. Unfortunately, the
huge advertising expenses were not able to make them top trusted and beloved brand among the
new entrants like uber eats and existing competitors in the market. Recently the govt. of
Bangladesh took a decision to impose license for the ride sharing service providers. Just before
the gov announcement Patho need to downsize their 350 employees who are working in top-
middle level. It creates a huge bad brand image in customers mind. Along with that some of their
female customers were harassed by the riders and their behave was unprofessional with the
customers, which leads customers dissatisfaction. Recently they also lose some of the investors.
The operations department of Pathao is trying to offer improved facilities to the clients with the
support of developed business operations. After discussing with the employees and the CXO
level the operation manager identified that they have done excessive cost on branding and
promotions without analyzing the market and competitors properly and also most of their
campaign didn’t work. Some of them was just money down the drain. They didn’t even concern
seriously on solving the customers complain. As a result, the other competitors took the
advantages to capture the customers base. And as they lost their investors and made excessive
expenses in marketing, they had to lay off their employees to minimize the cost.

In 2019 Pathao launched their new service “Pathao Food” for expanding their business and for
capturing the competitors’ position.