In September, when Lahore-based bike-taxi driver Muhammad Zain started his day, his first booking request on the inDrive app was for a drop-off around 11 kilometers away. He made a quick mental calculation and estimated a rate of 300 Pakistani rupees ($1). But inDrive, which works on a bid-based model that allows drivers and passengers to negotiate fares, restricted him from putting in the bid. It nudged him to offer half the price, which was “close to what the customer was offering.” Zain eventually got the ride for 165 rupees (around 50 cents).
This has been an everyday drill for Zain since he switched to inDrive from Careem in late 2022. He spends several minutes per ride bidding for the lowest price he can possibly afford. It has “made things worse for us riders because we have to do the additional work of bidding for rides,” Zain told Rest of World.
InDrive launched in Pakistan in early 2021 and quickly became the most downloaded ride-hailing app in the country, thanks to its bid-based model. But Pakistani gig drivers told Rest of World that for the most part, they only began using the app because their customers switched to it, and that they were overworked and underpaid. Though the inDrive model — with its absence of surge pricing — has been widely praised, workers who previously drove for apps like Uber and Careem said they now make less money.
InDrive workers also said they experience increased anxiety as they have to constantly look at their phones to engage in bidding wars — only to end up with the lowest possible fare for every ride. “It is stressful and exhausting,” Sarmad Zaran, a Lahore-based inDrive worker, told Rest of World.
InDrive — which promises to “empower passengers and drivers, not algorithms” — is only lending “a false sense of power” to drivers in Pakistan, according to Tobias Kuttler, a researcher associated with Fairwork, a labor project by the Oxford Internet Institute and WZB Berlin Social Science Center. “Drivers feel that they ultimately have to go with what the customer says. [They are] less likely to hold out for higher bids,” he told Rest of World.
Sidra Kiran, inDrive’s communications manager for Pakistan, told Rest of World the company has been regularly evaluating and adjusting the fare structure according to the economic conditions in the country. “Our aim is to maintain a sustainable and mutually beneficial ecosystem for all stakeholders amidst economic changes,” Kiran said in an email. “We’re keen on expanding to more cities.” Last month, inDrive expanded to five small towns in Pakistan that have previously never had a ride-hailing service, bringing its presence in the country to 16 cities.
The Russia-founded and U.S.-headquartered inDrive has seen similar pushback to its bid-based model in other countries. Research carried out by Fairwork in 2022 indicates that drivers in Mexico were skeptical about the bid-based model, with some saying haggling did not “automatically ensure a fair price.”
With other ride-hailing apps, you were assigned a fare, but here, you have to do more work and earn less.”
Some Pakistani gig drivers now feel that Careem, which has previously been criticized for its high commission fees, is the better option. “Customers have switched to inDrive because it is cheaper than Careem,” Zaran said. “With other ride-hailing apps, you were assigned a fare, but here, you have to do more work and earn less.”
One reason for inDrive’s popularity in Pakistan is the widespread unemployment in the country, Iftikhar Ahmad, labor researcher and principal investigator for Fairwork in Pakistan, told Rest of World. “Gig work allows people to avert unemployment and earn a daily living which would generally not be possible for those living in smaller cities or with lower literacy rates,” he said. Pakistan has an unemployment rate of 8.5%, and new research indicates its labor force is unable to accommodate workers with undergraduate degrees. This has led to a large number of unemployed graduates between the ages of 21 and 29 years.
According to Zubair Naeem Paracha, who writes a venture capital and emerging markets-focused newsletter named Termsheet, inDrive was able to “successfully poach a decent chunk of supply from other ride-hailing apps” by offering a combination of low commissions, cash payments, and the freedom to exert a degree of control over prices.
In September, Zakir Khan, a Karachi-based driver, wrote an email to inDrive, asking the company to discontinue the bid-based model entirely.
“I sent them a whole list of demands,” he told Rest of World. “I also asked them to change their bid-based model since it has become extremely difficult for us to accept fares below our operational costs.” Khan’s decision to approach the company was triggered by an increase in fuel prices in Pakistan, which was eating into his margins — even as customers continued to bid for the lowest possible rates.
Four days later, inDrive informed Khan that the base fares were being increased by 5% to factor in the fuel price rise. “It’s negligible, given that the price of fuel has increased so much,” he said. Gasoline prices have been fluctuating in Pakistan since January, increasing by up to 30% in September.
