We need more Ubers on the road — it is a product market fit to a whole different level
I am often asked about the Uber Dhaka launch — why it took the time that it did and what made it complex.
It has been a little over 3 years since I launched Uber in Dhaka, Bangladesh along with our first Dhaka hire, Zulquar and Paras who was on a short assignment from India (or so he thought). And I just found out that Dhaka launched UberPOOL and achieved its regulatory licence last week, so no better time than now to share the story :)
Strap in — let us begin in chronological order:
Uber Hyderabad launches cash as a payment method — 1st city to do so globally in the Uber world — today this is the backbone of growth in many emerging markets.
I make my first visit to Dhaka to greenlight the market. Within a week, I know a service like Uber will do phenomenally well in the city. Challenges: it is a pure cash market; locally issued debit/credit cards are not allowed to transact internationally; regulations are murky and something I found out later — financial infrastructure is archaic.
I return to the country to start prepping up for launch. Everything looks to be progressing well, till it is not. For any new country launch Uber needs to wire money into the country. One of the key goals of a launcher was to check that item off the checklist. So, I got bank details from 5–8 of my local acquaintances in Dhaka, banking with different banks, for the thoroughness of the test and sent that back to our finance team. They initiated the penny test, transferring $5–10 into each of those accounts AND to our surprise it does not hit the beneficiary bank. A week passes by, then a couple, we repeat the test changing a few variables, however nothing works — and that is an absolute first for our global finance/treasury team.
Back to square one. Let us solve for this, before we move forward for launch.
There are only a few international banks that operate in Bangladesh — HSBC, Citibank and Standard & Chartered, are the three most well-known. However, their market share is limited and the rest is driven by the local banks.
Oh wait, and then there was the Bangladesh Bank heist — $101 million stolen from Bangladesh Bank, that could have been a billion if not for a typo by the hackers. What follows next — governor of Bangladesh Bank resigns, banking guards are up and no one wants to entertain any of our creative solutions :)
Local regulators get a whiff of our plans to launch in Dhaka, and put out a notice declaring us illegal in the national newspapers. Wait, what? Another first right there — being declared illegal even before we have launched.
I am running solo all this while, and continue to do so these two months as well. I am meeting everyone possible, re-re-reading the 80 pager Motor Vehicles Act of Bangladesh until it is memorized, deciphering financial jargon to find a glimpse of hope — all because I have a hunch it is possible and the potential opportunity that lies ahead.
Towards the end of June, Zulquar joins us. Yayy on 2 fronts — I finally have company and someone local to help us navigate through the challenges.
We rent out an office space — it is bare bones, so we engage an interior firm to set it up.
And if you ask, why have we not leveraged our global relationships with international banks by now — we have tried, multiple times. However, it needs to be backed by the heavyweights of the region who do not believe in the market and as a result fail to understand the intricacies of the local challenges — refer to rule 1 above :)
The worst terrorist attack in Bangladesh’s history. Period.
It has been 6 months since we started working on the launch, and we are not getting any closer. This has started to have some very visible impact on the relationship I share with the region’s leadership, as their involvement besides asking the question, “when are we launching?” has been zero.
I am given an ultimatum — launch in the next month or we are scrapping this launch. Penny for Zulquar’s thoughts at this point :)
1st week: Around 2am local time, I get a ping from SF payments team. We have been coordinating with them for a while and finally it looks like we might have a solution. I woke right up, and jumped on a call at that hour. There is seemingly hope!
2nd week: With a financial solution in the horizon, Paras, an ops guy from the East India team, moves into Dhaka. It is time to roll up our sleeves and onboard drivers and we need ops horsepower. We get a bunch of local, freshly graduated kids to support us on ground in working with driver-partners. Though initially overwhelmed, never having experienced something this ambitious and dynamic, they quickly get behind the mission and become valuable contributors in our efforts to get this rolling.
3rd week: We do our first driver onboarding at our make-shift office on the 1st floor of an incredibly sketchy restaurant called Blue Moon. And we still have not managed to pay the interior firm who continue to work on the permanent office space, as the international wires into the country still refuse to cooperate.
4th week: San Francisco continues to work on the solution. ETA? Nov 15th — it is not possible before. That is a good 6 weeks away from now — should we wait it out or get creative? We go for the latter! :)
And by now, I have assumed the ultimatum has been extended for a few more weeks.
We start polishing off the edges of the creative plan and putting it on paper. For the 1st time in Uber’s history (or the 2nd time if you count how Uber was an invite only product for friends & family in SF), we lock in on a closed beta testing phase. What does that entail:
Limited number of Ubers on the road.
Invite only access. Between Zulquar and I, we make a list of 50–60 people in Dhaka who will be given early access to the product at a huge discount.
Strict rule of no shares on social media. We want to keep this on the down low.
Anyone new that wants access needs to reach out directly to us — we screen their profile, and only then grant them access.
Why we have resorted to this methodology:
To get over the inertia of not being able to launch and do trips — to build momentum.
To train the driver partners on the driver app and navigation — remember Dhaka is an emerging market, and drivers were far from using smartphones in 2016. Indeed for many drivers, this was their first exposure.
To test the product — tech infra, money, currency, backend systems, account creation, ETAs, traffic, traffic, traffic — Dhaka traffic is among the worst in the world, and Google Maps had not switched on traffic data in the country yet. For context, the ETA on our 1st trip was 5mins, while the Uber took 45mins+ to reach the customer — thankfully we knew the user well :)
To build pressure internally as rolling back is never easy.
The beta test continues on — and it surfaces plenty of bugs that we are able to squash or at least limit exposure to. We continue to train drivers.
In parallel, SF is ready by November 15th to roll out the solution.
The sprint towards launch begins. We lock in the date, Nov 22nd. We start locking in the driver ops, marketing, PR, tech, product, and our famed Rider Zero in Shakib Al Hasan — the number 1 all-rounder in the cricketing world!
The day of reckoning has finally arrived.
While Zulquar scours the town chasing after the Shakib money shot, Paras and I put the final tweaks on the back-end.
Shakib’s photo takes longer than anticipated as Zulquar runs into some challenges with a driver who has been accosted by the police. We want to launch at 10 am, but its almost fifteen past eleven when the Shakib picture for the blog post rolls in.
11:35am, Paras flips the switch on the backend and we are officially live. Social media and blog posts follow. PR follows thereafter, especially once Shakib Al Hasan shares on his social media. Demand is overwhelming — we had expected fireworks, but this was akin to Bangladesh beating India in the World Cup (there’s healthy, sometimes unhealthy, rivalry between the two countries when it comes to cricket).
For the next two days we are on the front page of every newspaper and TV channel in Bangladesh. Job done? Hardly. It is time to get all hands on deck — how do we get more Ubers on the road?!?! :)
A good story always has multiple hooks and turns — and Uber Dhaka was in for one. We bask in the glory for about 48 hours and then…
….we are declared illegal.
Disaster. But it is a moment of critical deliberation. In conjunction with our lawyer who flew in from India, we collectively decide that it is better to soldier on instead of shutting down given the mass wave of public support we receive. We initiate a dialogue with the Bangladesh Road Transport Authority.
Embrace the chaos!
We need more Ubers on the road — it is a product market fit to a whole different level.
It is impossible to find an Uber — as demand is far outstripping the supply. And we cannot turn on surge — too early in the market, and worst tactic to do so if you are in the thick of a regulatory productive dialogue.
Our temporary restaurant space is overflowing and we move into our half-finished office space. The restaurant owner is not happy — he had expected Uber to become a permanent fixture. He makes lofty demands which we do not agree to keep. Things get ugly and he locks me and Zulquar up and gets four friends and staff to intimidate us into agreeing to his demands. It is a scary moment but we mediate and find our way out safely.
We move into our own office space. However, this too is over-capacity in a matter of days. Thankfully, the upper floor is available — caveat being it is still under construction, cement is lying around, wiring is 20% done and painting job is far out. We cannot wait — so we sign the lease, and start onboarding drivers there on plastic chairs with a (borrowed) projector and a (borrowed) portable fan. Sweat is real!
We switch the service to 24hrs operational, from the initial 7am-10pm only.
And we solve for the smartphones for our drivers by partnering up with a local OEM. These partnerships that usually take months to materialize are being done in days — we are literally changing the tires of the car while driving at full speed. Hyper growth is keeping us alive, or default alive in Paul Graham speak.
We come to realize that our pricing was off. We had underestimated multiple costs that go into driving & driver wage, and hence had to pay the difference on top to make it viable for driver partners.
I propose a price increase — an almost 25% step up. It is unheard of at Uber to do a price increase this early into a marker launch — if anything we only slashed prices up till then to start the flywheel of more demand -> more trip for the drivers -> higher utilization -> more $$$ / hour for the driver partners. The proposal is met with pushback — I am told to continue with the same pricing and solve for the supply. It is almost like they forgot the underlying economics of supply & demand — one that any marketplace is built on, and resort to “this is how we’ve done things historically.”
I push back — step on toes. Hell, I might have squashed a few toes. And we go in for the price increase — 20%+. Yes, it is not met with open hands by the discount seekers, however the business metrics change overnight — our burn has halved in a span of a week, while the market still continues to grow at break-neck speed with a sprinkle of light promos.
Much more of the above. We are focused on hiring, scaling, ops, onboarding drivers, marketing, PR, policy, legal, tax, support, infra and a lot more. Did I mention onboarding drivers?
Dhaka becomes the fastest growing city in the Asia-Pacific region.
Goes without saying, I have fast tracked through Jan to May as a lot of it is confidential.
Another immediate impact that the success of Uber launch had on Bangladesh was eyeballs on the local startup ecosystem. Since then, Pathao has raised capital from Go-Jek and others to put on a fight, multiple food delivery players (Foodpanda, Hungrynaki, Pathao food besides UberEats) have launched/scaled in the market, a startup made it to Sequoia’s Surge batch 1 (look for ShopUp), and the funding environment for local tech startups has improved multi-fold.
Mission accomplished! :)
If you have made it this far, or simply skipped to the bottom, here are a few bonus thoughts on the Dhaka launch:
Watch the video of Uber Dhaka. Still gives me goosebumps.
Someone I respect with the Uber org told me — always punch above your weight, irrespective of the position you are at. Good motto to live by.
Zulquar recommended me the movie Moneyball, and to this day I draw parallels to the movie. We three, the Space Men, were far from perfect, however we managed to punch much higher than our weights to pull this feat off.
Utsav Agarwal spearheaded Uber's complex launch in Bangladesh. He is now an investor in multiple startups.