“Apart from the salary we offer and the incentives, we give life insurance to our drivers and their family free of charge; it (surge) is in a way to help them earn more income.”
“This is not entirely about surge pricing but more of an incentive for our drivers to work too,” Sathiyasiva said.
During peak hours, PickMe drivers turn off their meter and charge higher prices from those travelling to the outer suburbs of Colombo, commuters say.
PickMe’s main competitor Uber had surge pricing since its Sri Lanka launch in 2015.
PickMe Founder Chairman Ajit Gunawardene last November was quoted as saying in Sri Lanka DailyFT newspaper that a public listing was planned for 2020 and, and the firm was worth 12 billion rupees before its fourth funding round, placing the ride hailing firm among the top 45 listed firms.
US-based ride hailing apps such as Uber and Lyft which went public in 2019 have seen big losses due to driver and rider incentives, insurance, research and other costs.
IPOs of both Uber and Lyft were flops. Prices of both Uber and Lyft had fallen after listing, and and investors have been pushing the firms to present plans to become profitable.
Analysts have said that new economy businesses are staying private for too long, and are pushing up their valuations through private fundraising rounds, which are being used to expand into new markets and accelerate research and development.
In the end, private investors profit at high valuations and dump the losses to public investors, analysts have said.