When Maha Shazad was 19, she had to drop out of university in Pakistan because she couldn’t find safe and reliable transportation. Shazad explained this to TechCrunch 85% of working women In the country they were subjected to sexual harassment at least once on public transportation. Then when she started working, she spent more than half her salary finding safer options for her daily commute, a problem she says many Pakistanis face.
“The dire situation when it comes to mobility is a very real problem facing Pakistanis across the country, especially women,” she said. Shazad founded BusCaro To give passengers a safe and reliable alternative to their daily commute.
The startup announced today that it has raised $1.5 million in seed funding led by Orbit Startups, a SOSV program for startups in emerging markets. The round also included participation from Wahed Ventures and angel investors from the mobility sectors.
BusCaro lets riders book rides through an app, but unlike other ride-sharing apps, it uses a B2B2C model. For example, universities work with BusCaro to provide students with reliable rides, while factories use it to provide transportation for workers. This also enables BusCaro to match demand with supply and increase operators’ income while keeping costs low for passengers.
It ensures passenger safety through features like driver background check, vehicle screening and tracking. BusCaro also has a 24/7 emergency response team and customer support team, and a live tracking feature that allows riders to share their location with friends and family. Another feature, created specifically for women, allows them to use a masked name instead of their real name to show to their drivers. The startup is currently working on creating a panic/SOS button in the app that will connect passengers directly with BusCaro and its safety partner, security agency Mohafiz.
Since its launch in 2022, BusCaro has expanded its operations in Karachi, Lahore and Islamabad and now has over 300 vehicles owned by private operators, making over 20,000 bookings daily. The startup says it’s on track to become profitable by early 2024, and recently reached $2.5 million in revenue.
Before founding BusCaro, Shazad worked at ride-hailing app Careem, which was acquired by Uber in 2020. Despite Careem’s success, Shazad realized that it could only be afforded by 2% to 3% of riders. She then joined Swvl, another mobility startup, which offered several transportation options besides cars. But as macroeconomic conditions deteriorated last year, Swvl decided to exit Pakistan. As Managing Director of Swvl Pakistan, Shazad says she was at a crossroads.
“I knew that despite the model’s extreme unit economics, SWVL was solving a big problem, and we had to keep solving that problem,” she says. “That’s when we put the first BusCaro on the road and started on this journey.”
She adds that BusCaro’s model differs from the high-cost, investment-intensive customer acquisition model used by other ride-sharing apps. By partnering with businesses and academic institutions, BusCaro is able to reach a user base of employees and students on a seat-based B2B or B2B2C model. Shazhad says its business model has reduced BusCaro’s customer acquisition cost to almost zero.
BusCaro’s goal is to provide safe and affordable daily commuting options for everyone. Shazad says there is not enough public transportation to meet demand, and it is often unsafe, especially for women. Private mass transit companies that can leverage technology to expand efficiently do not currently exist in the country, and passenger transportation options are unaffordable for many people.
BusCaro’s benefits include aggregating demand, while stabilizing and improving supply payout, which helps carriers’ cash flows, she adds. It is also able to offer competitive prices to customers because it uses buses and vans, 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, and women spend more when looking for safer options. BusCaro’s target customers are people who earn less or who cannot afford to spend that much of their monthly income on transportation.
Another audience for BusCaro is office workers who are tired of driving their own cars to work due to high fuel prices and lack of parking spaces. Other users include students, especially girls, whose parents want them to use the safe transportation option.
“With BusCaro, they feel safe because of the measures we have put in place including double checking our captains, checking vehicles and tracking your journey feature in our app, which enables both the user and anyone they want to share it with to track the journey,” says Shazad.
BusCaro competes with several categories of passenger and public transportation platforms. Shazad says Careem is expensive even for its current user base, but BusCaro is a third of the cost. There are other ridesharing companies in Pakistan like In-Driver which are a little cheaper and reliable, but they do not have security measures, which BusCaro does.
BusCaro also opposes public transportation, but Shazad calls it “inadequate” and “completely unsafe.” She adds that most riders use them due to affordability constraints and would be willing to find other alternatives if they were available to them. Other public transport options include government-funded buses in Karachi, but Shazad says there are not enough vehicles to meet demand, and most cover limited routes.
Finally, BusCaro faces private competitors, but they do not have the same tools as BusCaro to aggregate demand and improve supply operations.
BusCaro is “currently focused on growing our existing business by adding more accounts to our portfolio now,” Shazad said. It plans to expand its B2B2C partnerships and add more B2C partnerships. BusCaro also plans to work with the public sector on things like transportation subsidies, carbon emissions reductions, software as a service, and government transportation contracts. BusCaro is currently looking to add e-vehicles for next year, to reduce its costs as fuel prices rise.
In a statement about the investment, William Bao Bin, managing partner of Orbit Startups, said: “Diversity and inclusion is difficult to achieve when women must spend up to 30% of their salary to get to work in a safe and predictable way. We supported BusCaro because it enables women and men to book safe, inexpensive and efficient shared transportation to and from work, driving opportunities and unlocking the general economy.