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🇵🇰 Pakistan /Economy & Trade

Car shortage holds back Pakistan’s ride-hailing market

From The Express Tribune · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Ongoing story
  • Pakistan’s ride-hailing market has reached about 5 percent of the population, compared with roughly 20 percent globally, according to inDrive.
  • The company says a shortage of vehicles is limiting growth and has urged banks to help finance freelance drivers.
  • Experts said such lending could expand the driver pool but warned that unstable incomes, rising fares and loan risks could challenge banks.

Pakistan’s ride-hailing market has reached only about 5 percent of the population, leaving substantial room for expansion but too few vehicles to meet it.

Wael Ibrahim, inDrive’s regional director for Europe, the Middle East and Africa, said the company sees Pakistan as one of its fastest-growing and most strategically important markets. Since entering the country in 2021, inDrive has expanded to more than 20 cities, while its intercity service links over 200 cities.

Unstable demand and income

· Yasin KodvaviThe Optimus Capital Management research head identified this as a risk banks would face when lending to freelance drivers.

Ibrahim said rapid urbanisation, increased smartphone use and weaknesses in public transport were driving demand for affordable and reliable mobility. But he identified vehicle availability as one of the industry’s main supply constraints. The company suggested that better access to auto financing could bring more people into the platform economy as freelance drivers.

Car financing has already begun to recover. Yasin Kodvavi, research head at Optimus Capital Management, said financing had risen by about 35 percent to approximately Rs381 billion, from nearly Rs275 billion a year earlier. He said banks could lend to freelance drivers, but verifying borrowers and assessing their repayment capacity would be difficult.

The auto-financing limit remains capped at Rs3 million despite repeated calls to increase it to Rs6 million.

· Yasin KodvaviHe pointed to the financing ceiling as another constraint on vehicle purchases.

Freelancers may face unstable demand and income, and they have no binding commitment to continue driving, Kodvavi said. Rising ride-sharing costs could also weaken demand. He noted that the auto-financing ceiling remains Rs3 million despite calls to raise it to Rs6 million.

Former PAAPAM chairman Abdul Rehman Aizaz said vehicle financing through equal monthly instalments plays an important role in car sales worldwide. Pakistan restricts both loan limits and tenures, he said, while banks are generally more comfortable lending to the government than taking risks in consumer finance. Aizaz acknowledged the risks of financing freelance drivers but said the idea could work with carefully designed safeguards and government support.

With well thought-of safeguards in place and support from government

· Abdul Rehman AizazThe former PAAPAM chairman said freelance vehicle financing could have significant potential under those conditions.
About this summary

Originally published by The Express Tribune in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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