Zeeshan Baig is currently CEO and Country General Manager Careem Pakistan. He joined Careem in 2017 and led city and service expansion within Pakistan. With experience of over 10 years in strategy and operations, Zeeshan is a growth specialist. Prior to joining Careem, he worked as a Management Consultant at Deloitte Middle East where he delivered consulting assignments in over 20 countries across MENA, Europe and South Asia.

Zeeshan, LUMS Alumnus, holds an engineering and MBA degree, in addition to executive education from Harvard Business School.

Following are the edited excerpts of a recent conversation of BR Research with CEO Careem that revolved around the impact of COVID-19 on the company:

BR Research: What has been the impact of COVID-19 on the ride-hailing market globally and in Pakistan? Could you put a number to the impact on Careem’s revenues?

Zeeshan Baig: Covid-19 is one of those incidences that I call a black swan event, because nobody could’ve predicted it. It has impacted almost every aspect of people’s lives globally. We witnessed a significant change not just in the way normal daily activities are carried out but also in consumer behaviors and expectations. Globally, there has been a massive effect of the pandemic on numerous industries such as ride-hailing, tourism, airlines, amusement, cinema’s etc.

If you talk about ride-hailing sector, it is unfortunately among the hardest hit sectors. Careem had to close its services in many countries and our global revenue went down by almost 80 percent, since a lot of lockdowns were imposed. That was a big dent to our revenues. Our services in Pakistan were affected too and varied with region, for example, we continued operating in ICT (Islamabad); whereas in Karachi and Punjab there was a complete ban; in KPK inter-city commute was banned but was working intracity. Generally, even if lockdowns were not imposed, people were not going out and demand was down quite a bit. I think we got hit on both sides, demand, and supply- because lockdowns were in place.

BRR: When the lockdown was imposed in Pakistan, how did Careem respond and what has been your survival strategy?

ZB: The pandemic has simultaneously paved the way for growth of e-commerce all while enabling people to move towards a digital lifestyle. Well in our truest form, we are an agile technology company and are working in a way that we are quite comfortable changing direction rapidly. At the start of the pandemic, we reassessed our strategy and had to take cost out of the business at all levels.

A primary strategy we work on is that we always remain flexible; if something works, we are very keen on adopting it. We realised that while ride-hailing was a great start and has given us the ability to expand and grow, that cannot be the only thing we do. And the vision and the aspiration always was to simplify lives of people, which is not just needed in transportation, but in so many places like getting water, or buying something from a store.

Our survival strategy can be divided into two parts - improving and adding security to the pre-existing ride-hailing services and adding new features to our portfolio by launching Pakistan’s first Super App; something which we had been working on for a while. So, for Careem as a platform, delivery was one of the big growth levers I would say that came out of Covid-19.

As far as ride-hailing is concerned, we have emphasized greatly on security. We partnered with numerous firms to provide safety kits to all our captains, we raised awareness by adding in app notifications and compulsory check lists for captains. Similarly, we set rules as per the SOPs provided by the government and regulatory authorities. We even did awareness campaigns in collaboration with them.

The good news is, if we talk about Pakistan only, fortunately we have been able to control our cases which also means that recovery in ride hailing which is our core business, is much quicker as compared to other countries. For us, ride hailing is recovering, and we have explored a lot of new opportunities, in form of deliveries- related to food. So, we are capitalizing and double downing in on those opportunities as well.

BRR: What exactly is the Super App?

ZB: One challenge we started facing with Careem coming up with multiple service was how to make sure that our customers were not using multiple applications. So, we came up with the idea of Super App.

Super App is basically a one stop solution for your everyday needs. In other words, it is an app which works as a mall on your phone on which you can get numerous services from getting a ride, to ordering food, getting groceries, topping up your mobile phone, getting whatever you want delivered wherever you want.

The launch of the Super App is also in correlation with Careem’s purpose: to simplify and improve the lives of people and build an awesome organisation that inspires. The idea is to transform Careem from a vertical service, which does one thing across many markets to a platform that starts simplifying lives across many things.

The overall idea is that through its open architecture, we can allow developers and companies to put their services on the Careem Super App and benefit from our customer engagement and also benefit from the enabling services we have built. A lot of them would require some logistic capability or payments so they can leverage our infrastructure.

BRR: You mentioned that global revenues were hit by around 80 percent. What kind of growth have you seen in pre-pandemic times and how well were you prepared to face the challenges of COVID-19?

ZB: There are 3 vastly different phases: pre-pandemic, during-pandemic, post-pandemic. Pre-pandemic, our growth was coming from our core business which was ride-hailing. We expanded to 13+ cities. We also launched a lot of different car types, e.g bike, rickshaws, different variants in cars; and we also launched inter-city services as well. These were the growth levers for us pre-Covid.

The good thing was we had done some experimentation on deliveries as well, especially on the food front. Although the scale of that segment was pretty small, but we had some learnings from that, and the team was trained to scale that operation. The moment Covid hit, we realized that we couldn’t do anything about the core business other than ensuring that our cars are very very safe for the customers. With Covid-19, everything got expedited; what we would have done in a year, we ended up doing it in 2 months time. Super App is our big bet for the year and the pandemic has accelerated the shift.

BRR: Have you launched it already?

ZB: Yes, we launched it in June to 100 percent of the users. Initially the plan was to launch it in quarter folds, but with pandemic, we realised the need for the app is right now.

BRR: What have been the growth strategies of the competition?

ZB: During the pandemic, most of the companies that operate in more or less similar areas as we were initially trying to maintain services and stay afloat let alone thinking about growth. However, from what I have assessed is that all firms are investing heavily to improve their existing businesses and services. We have seen a lot of new businesses being launched during the Covid, which is always a good thing.

Another significant thing to note here is the fact that the Pakistani consumers have also started to accept digitalization during the pandemic. We encourage healthy competition in the mobility, delivery and payment space in Pakistan like any other country. The opportunity in this space is still very largely unexplored. The pie is still large enough that more players will only help the industry grow much faster and align regulators on the need to support tech platforms that can enable change.

BRR: Since Uber took over Careem, what synergies have you experienced. Has one cannibalised the other's market share?

ZB: We have a great partner in Uber, and they have been alongside throughout this crisis. The financial quotient the company has gotten from this acquisition is tremendous. However, we are an independent brand operating within the Uber family. The two brands have absolutely separate brand identity with absolutely different strategy; there is no information sharing and there is no influence over each other at market levels in Pakistan.

And there is no cannibalization of market share because if you look at the market, both of these players combined, have acquired less than 1 percent of the current market. Market size is so big that even if there are 3-4 players, there would still be ample space for them. We have just scratched the surface.

BRR: Many captains were let go in the lockdown. Do you plan to or have you taken them back on board? Also, what security upgrades are you talking about?

ZB: That is a misconception. Careem operates on an online marketplace model run by the forces of demand and supply. Captains who work with Careem are our business partners and have flexible working hours based on their convenience. So by nature of business there will never be a time that we will have to let go of our Captains. Careem so far has registered more than 700,000 captains on its platform and we saw a considerable amount still coming to Careem even during the lockdown period. Around 15000 captains registered during lockdown period.

We've worked hard to keep the marketplace open for them by creating new delivery opportunities and working with governments to support local relief efforts. However, since the demand was low from customers, our captains faced a very difficult time but we believe that the worst is over as recovery has started taking place.

Our delivery as well as food delivery options worked quite well, in fact since Covid has started, we have onboarding of approximately 15,000 captains to our network. Similarly, as soon as the services resumed so did the demand for ride-hailing services and most of the Captains started to get their earnings back.

In the short to medium term, our primary focus is to ensure, more than anything else, that our captains, many of whom rely on Careem as a single source of income, are facilitated to the best of our ability. In that respect, we have taken many steps, and we're working tirelessly to ensure we can help every affected captain in one way or the other. Colleagues across our network have donated generous sums of personal money to captains, with some contributing their salaries for the rest of the year.

We are facilitating captains to receive medical insurance for hospitalization and ICU in case they or their family members are infected. We are providing sick pay financial support for 14 days to any Careem Captain who is diagnosed with COVID-19 or placed in individual quarantine by a public health authorities. We are leading discussions with financial institutions to pause car loan payments, and have engaged governments on license fee and stimulus programmes. We also partnered with relevant NGOs to provide rations to as many captains as possible.

We are in constant communication with captains and customers to maintain hygiene standards. To further these efforts our team has also established an Information Bot on Careem Facebook page for an easier flow of awareness regarding COVID-19 for the Careem community. We are ensuring more flexible captain side policies, apart from hygiene requirements of course; so, policies such as cancellations are relaxed to provide flexibility to captains due to extraordinary circumstances.

If you look at customer side, we made sure that customers should be wearing masks. And we set a limit of passengers in the car of no more than three passengers in a car.

BRR: What about Careem employees?

ZB: To survive and protect our independence, we must be self-sustaining by the end of the year. This means we must radically change our cost structure which impacted 30 percent of of the employee base globally. However, as business is improving, we are re-hiring for numerous roles and are taking initiatives to attract and retain top quality talent.

BRR: What is Careem Pay?

ZB: Careem Pay is a digital wallet for Careem, which is an alternative to cash. You can use your credit or cards on file to make all payments on Careem. Furthermore, you can transfer careem pay credits from person to person as well. It can be topped up your credit in the app if you’ve added a credit/debit card. It can also be used to facilitate the payments for all of the functions in the Careem Super App.

Currently we are offering three features in Careem Pay besides being used for paying for the rides: peer to peer transfer of Careem credit, mobile top-ups, and recharging Careem Pay account connected to the debit or ATM card. But we are looking forward to adding more services on Careem Pay, as we get license from the regulators. The entire Super App infrastructure also requires a robust payments solution (Careem Pay), which is extremely critical to the entire equation, since it not only encourages the over 90 percent cash based transactions on the platform to go digital but also provides a range of financial services which fills a big gap in the entire region. Careem I think is very well positioned to leverage this opportunity. Reason why I am saying this is, Pakistan has a lot of remittance. Imagine Careem comes up with a solution for digitizing and channeling international remittance formally.

BRR: How do you see the changes brought by COVID over the next year? What is your forecast for ride-hailing sector and the general economic activity in the country?

ZB: The road ahead for Pakistan’s economy is a promising one. At the risk of sounding too bleak, no individual, organization or government should believe that a silver bullet will save us all. The economy is changing whether we want it to or not. What is in our hands is how to adapt to the changing economy.

Companies need to stay ahead of the trends in their industry, identify opportunities in a post COVID world and adapt early. In Pakistan for instance, the adoption of digital services will accelerate rapidly and any tech company will easily be able to recognize that trend. It's equally, if not more important for the non tech sector to digitize quickly as well. Restaurants, shops, the entire service sector, even government services.

Governments have to be equally quick to regulate the tech industry and help it bloom. Good government policy is critical to the rise or fall of the tech sector in any country. The gig economy which was largely unregulated in the country needs to be recognized and focused on, the same way as the current government is focusing on exports, for instance.

As for Careem, we have two focus areas over the next 6 months; Safety is the biggest ticket item for us this year, and then we have to double down on the delivery opportunities. Jun-Aug were good months for us, as ride-hailing very quickly observed recovery. Although not 100 percent of pre-COVID levels. we expect very decent recovery by the end of this year. And 100 percent recovery by the end of 2021.