When Maha Shazhad was 19, he was forced to drop out of university in Pakistan because he could not find safe and reliable transportation. Shazhad explained to TechCrunch that 85% of working women in the country faced sexual harassment at least once in public transportation. After he started working, he spent more than half of his salary on finding safer options for his daily commute, a problem he says many Pakistanis face.
“The dire state of affairs when it comes to commuting is a real problem facing Pakistanis across the country, especially women,” he said. Built by Shazhad Bus Car to provide commuters with a safe and reliable alternative for their daily commute.
The startup announced today that it has raised $1.5 million in pre-seed funding led by Orbit Startups, SOSV’s program for startups in emerging markets. The round also includes participation from Wahed Ventures and angel investors from the mobility sectors.
BusCaro allows commuters to book rides through an app, but unlike other ride-sharing apps, it uses a B2B2C model. For example, universities work with BusCaro to offer students reliable rides, while factories use it to provide transportation to workers. It also allows BusCaro to match demand with supply and increase operator revenue while lowering passenger costs.
It ensures rider safety with features like driver background check, vehicle inspection and tracking. BusCaro also has an emergency response team and a 24/7 customer support team, and a live-tracking feature that allows riders to share their locations with friends and family. Another feature, created for women, allows them to use a masked name instead of their real name to show their drivers. The startup is currently working on creating a panic/SOS button in the app that will directly connect passengers to BusCaro and its safety partner, security agency Mohafiz.
Since its launch in 2022, BusCaro has expanded its operations to Karachi, Lahore and Islamabad and now has more than 300 vehicles, owned by private operators, and makes more than 20,000 bookings per day. The startup says it’s on track to become profitable by early 2024 and recently hit $2.5 million in revenue.
Before founding BusCaro, Shazhad worked on the ride-hailing app Careem, which was acquired by Uber in 2020. Despite Careem’s success, Shazhad realized that it could only reach 2% to 3% of the passenger. He then joined Swvl, another mobility startup, which offers more transportation options besides cars. But as the macro-economic situation worsened last year, Swvl decided to exit Pakistan. As general manager of Swvl Pakistan, Shazhad says he is at a crossroads.
“I know that despite the extreme economic unit of the model, Swvl is solving a big problem and we need to continue solving that problem,” he said. “That’s when we put our first BusCaro bus on the road and started this journey.”
He added that BusCaro’s model is different from the investment-heavy, high customer-acquisition cost model used by other ride-sharing apps. By partnering with corporate and academic organizations, BusCaro can gain access to a user base of employees and students in a B2B model or a seat-based B2B2C model. Shazhad says its business model has reduced BusCaro’s customer acquisition costs to almost zero.
BusCaro’s goal is to provide safe and affordable daily commuting options for everyone. Shazhad says there isn’t enough public transportation to meet demand, and it’s often unsafe, especially for women. Private mass-transit players who can use technology to scale efficiently are currently absent in the country, and ride-hailing options are out of reach for many people.
He added that the advantages of BusCaro include aggregating demand, while stabilizing and optimizing for supply payout, which helps the transporter’s cash flows. It is also able to offer customers competitive prices because it uses buses and minivans, resulting in lower costs per fixed seat and fuel savings.
Many commuters in Pakistan spend about 20% to 50% of their income on commuting and transportation, with women spending more as they look for safer options. BusCaro’s target customers are people who have low incomes or cannot spend as much of their monthly income on transportation.
Another audience of BusCaro is the office workers who are tired of driving their own cars to work because of the increase in fuel prices and lack of parking spaces. Other users include students, especially girls, whose parents want them to use a safe commuting option.
“With BusCaro, they feel safe because of the measures we have taken including checking our captains, inspecting the vehicle and tracking your part of the ride in our application, which allows the user and whoever they want to share it to track the trip,” said Shazhad.
BusCaro competes against several categories of ride-hailing platforms and public transportation. Shazhad says Careem is expensive even for its existing user base, but BusCaro is a third of the cost. There are other ride-hailing companies in Pakistan like In-Driver that are cheaper and reliable, but they don’t have the security measures, which BusCaro does.
BusCaro is also against public transportation, but Shazhad described it as “inadequate” and “unsafe.” He added that most riders use it due to affordability constraints and they are willing to look for other alternatives if they are available to them. Other public transport options include government-funded buses in Karachi, but Shazhad says there aren’t enough vehicles to fill demand, and most are on limited routes.
Finally, BusCaro competes with private players, but they do not have the same tools as BusCaro to aggregate demand and optimize supply playouts.
Shazhad said that BusCaro is currently “laser focused on growing our existing business along with adding more accounts to our current portfolio.” It plans to expand B2B2C partnerships and add more B2C partnerships. BusCaro also plans to collaborate with the public sector on things like transportation subsidies, reducing carbon emissions, SaaS and government transportation contracts. BusCaro is now looking at adding electronic vehicles for next year, to reduce its costs as fuel prices rise.
In a statement about the investment, Orbit Startups managing general partner William Bao Bean said, “Diversity and inclusion are hard to achieve when women have to spend north of 30% of their salary to get a job. in a safe and predictable way. We support BusCaro because they enable women and men to book safe, affordable and efficient shared transportation to and from work, driving opportunities and open up the whole -the economy.”