The startup ecosystem in Pakistan had a tumultuous day on Thursday with at least three notable players announcing service suspension, rollbacks and layoffs.
Citing shifting economic conditions, prominent ride-hailing service Careem said it has suspended its food service in Pakistan. An official statement said the move will help the company focus on serving its customers’ needs for ride-hailing and delivery segments instead. It vowed to “look to restart the service again” whenever the “economic condition” becomes more favourable.
The company laid off only one person while the rest were accommodated in the mobility segment, a spokesperson for Careem told Dawn in a phone interview. The company remains committed to ride-hailing and (non-food) delivery services, they said.
The official statement didn’t mention exactly which “economic” indicators led the company to suspend its food service. Referring to elusive reasons like the global recession, the spokesperson said the company can’t “burn cash” on the food delivery service that it started in 2019. They refused to say whether Careem operations have hit breakeven in Pakistan.
Uber acquired Careem in 2020. According to Crunchbase, a prospecting platform for dealmakers, Careem has raised a total of $771.7 million in seven funding rounds. Separately, app-based bus service Swvl also said on Thursday it’s “pausing” its service in Karachi, Lahore Islamabad and Faisalabad June 3 onwards because of the “global economic downturn”. However, it’ll continue operating its inter-city buses along with Swvl Business, which is its business-to-business segment.
Responding to a poll on Dawn.com, more than half of the 1,140 respondents said they’ll be affected by Swvl’s decision to suspend its intra-city bus service. Previously, another bus-hailing service, Airlift, shifted the focus of its business from transport to grocery delivery during the pandemic.
Meanwhile, app-based freight management ecosystem startup Truck It In said in a blog post on its website on Wednesday the “global economic uncertainty” is forcing it to “recalibrate” its strategy. Insisting that the company is “wholly committed” to serving shippers and truckers in a “leaner” way, it said some of its colleagues will be moving on to “solve other challenges”.
The company will provide the affected work force with “generous severance packages” and help find alternate employment opportunities, it said. The company raised $13m in seed funding in February and called it the largest in the trucking space in the Middle East, North Africa and Pakistan region. The last round brought the total raised capital by the company to $17.5m.
Source: This news is originally published by dawn