While app-based ride-hailing and food delivery company Pathao is aggressively expanding its operations, other similar companies remain stalled as they await expansion guidelines within and outside the Kathmandu Valley.
After six years of service in the Kathmandu Valley, Pathao began service in 18 cities nationwide from April 13th, Nepal’s New Year. The service started in Chitwan in September 2022.
The company said there has been a recent increase in demand for convenient and cost-effective transportation services outside the Kathmandu Valley.
“We have now reached all seven provinces,” said Suraksha Hamal, head of marketing at Nepal Pathao. “Within a week of announcing the expansion, she received applications from 5,000 riders. More than 1,000 rides operate daily in Kathmandu and the outskirts of Chitwan. Both riders and customers are growing. ” she said.
Customers in the newly expanded market will be able to bid on the approximate fare displayed in the app when using the ride-hailing service, Hamal said.
Pathao was founded in the US in 2015 and officially launched in Kathmandu on September 24, 2018.
Pathao’s ride-hailing service has been expanded to nine cities in Kosi state including Biratnagar, Damak, Urabari, Birachowk, Itahari, Inarwah, Dharan, Birtamodo and Bhadrapur. In Madhesh, Pathao ride-hailing services are available in Birgunj and Janakpur.
Similarly, Pathao ride-hailing service has been launched in Pokhara in Gandaki district. Butwal in Nepalgunj, Bhairahawa in Lumbini district and Birendranagar in Sudurpashim district.
The company plans to further expand its services to other cities in the country soon.
Tootle, the once popular ride-hailing platform that resumed service on September 1 last year, is now focused on delivering goods. Company officials said there are no immediate plans to expand services outside the Kathmandu Valley.
Tootle, a Nepalese technology startup, started operations in January 2017.
Initially, a team consisting of Ayush Subedi, Prinshi Koirala, Bina Lakshmi Shrestha, Shikshit Bhatta and several others designed the app to track Saja buses. It quickly became popular. But marketing and lack of transparency began to erode that public trust. Later, Pathao emerged as the dominant player in the market.
Zapp Services Pvt Ltd currently operates Tootle. The company declined to comment on its plans.
US-based Indrive launched its services in Nepal in April 2022, when Pathao enjoyed market monopoly after the collapse of Tootle.
Currently, inDrive’s ride-hailing service is available in Kathmandu, Pokhara, and Chitwan.
The company also said it has no immediate plans to expand to other cities. Industry sources say inDrive is awaiting government guidelines to ensure legality.
“There are no immediate market expansion plans in Nepal. “We want to focus on the cities where we are, and we want to grow the business there,” said Pavit, head of communications for Asia Pacific at inDrive. Nanda Anand told the Post via WhatsApp.
“Nepal is an exciting market and we entered the market to support local communications and connect drivers and passengers to provide affordable and convenient mobility solutions.”
The company did not disclose the number of passengers and vehicles in Nepal.
inDrive became popular among Nepalis in a short period of time as it released an app where service seekers could negotiate fares.
For Pathao, Pokhara and Butwal are currently the best performing markets. “Growth is gradually accelerating in other cities as well,” Hamal said.
Pathao plans to start services in autorickshaws, a popular mode of transportation in most of the Terai regions. “We have expanded our service so that people who want the service can book a ride from one city to another.” Pathao receives a 20 percent commission on every bike ride.
More than 200,000 people are involved in the platform, including more than 90,000 cyclists, more than 10,000 taxi drivers and 5,000 food delivery workers, Patao said. That’s what it means.
Two other companies, Tootle and InDrive, do not disclose numbers.
In February this year, the government classified ride-hailing services as a service-oriented industry under the Industrial Enterprises Act 2020. This gives legal status to ride-hailing companies that have been operating in Nepal for seven years.
However, the government is busy enacting provisions to establish guidelines to govern ride-hailing companies by regulating fares.
The draft dispatch guidelines proposes that cars and motorcycles used for dispatch be registered and operated in accordance with Ministry of Transport regulations, similar to traditional taxis.
According to the guidelines, companies are required to update their operations at transportation management offices every year.
The guidelines will also regulate fares and require passenger insurance.
The Motor Vehicles and Transport Management Act 1993 states that vehicles registered for private use should not be used for public transport.
Bagmati province officially legalized ride-hailing services in June 2022, but did not issue any guidelines or policies.
According to the Auditor General’s 60th annual report, there are 25 ride-hailing companies in Nepal that use Global Positioning System (GPS) and digital platforms, but none are registered for current operations.
