Shohoz ‘laying off’ ride-sharing, food delivery teams

Outgoing employees of Shohoz, a leading multi-services startup, allege that the company is laying off its ride-sharing and food delivery teams as the businesses are not in the best shape right now.

The company, however, maintains the redundancies are part of the regular employee turnover process.

According to outgoing employees, a total of around 50 personnel will have their last day in Shohoz on 31 October.

Forty-five of the laid-off employees are related to food delivery services and the others are part of the ride-sharing wing, which suspended operations since the first lockdown put in place last year amid the pandemic.

Disputing the term 'lay off', Shohoz Founder and Managing Director Maliha M Quadir said the turnover was part of the regular hiring and firing process.

"We are saying goodbye to some underperforming and temporary employees. The actual number is much smaller than the one stated."

She, however, did not disclose the number of employees who are going to lose their jobs at the end of the month.

Four employees who talked to The Business Standard seeking anonymity said except for those in strategic positions, no ride-sharing or food delivery employees would remain with the company after October.

Fighting on many frontiers

Shohoz, founded in 2014 for online bus, launch, events and movie ticketing services, secured its edge and became the market leader in the ticketing segment, a position it holds till today.

Later, it opted to be the top online destination for Bangladeshi consumers and kept opening new services through the same Shohoz app, attracting an estimated $30 million in foreign investments till last year.

The added services range from app-based motorcycle ride-sharing, truck booking, and home delivery of foods, groceries, and medicine, alongside online doctor consultation and digital education.

It entered the then booming app-based motorcycle ride hailing service in March 2018.

Shohoz grabbed a fair share of the market, mainly through promotional codes for customers and additional incentives for motorcycle riders.

Shohoz's fight for the second position in the ride-hailing market, however, fizzled out after the pandemic when the government in 2020 suspended motorcycle ride-sharing to curb the spread of Covid-19.

Its competitors Uber and Pathao reopened their motorcycle services once the suspension was lifted, but Shohoz did not resume the service.

"Complying with the government order, we kept our ride-sharing services off and later did not resume as the industry had suffered too much damage over the period," Quadir told The Business Standard on Friday.

A large portion of its customers also went off-app to secure the service and many riders and passengers preferred avoiding the commission the rides generated for their respective platforms, which hurt the industry's revenue, she said.

Shohoz also stopped its truck booking service, which was launched in 2019.

"Truck booking was stopped because it was noncore and not synergistic to our consumer verticals," Sohoz public relations department said in a written statement.

The statement also claimed Shohoz was now reevaluating how and when to relaunch the ride-sharing services.  

Meanwhile, a former employee of Shohoz's food delivery team believes that the startup, which was fighting for the second spot in the food delivery market a year ago, can now only hope for the third position at best.

Shohoz opened their food delivery wing in late 2018 and started deliveries a few months later. It added more than 1,500 restaurants to their network in less than a year and served 3,000 orders a day, according to an earlier interview by the company's founder.  

But, amid a race for providing high discounts on food in an extremely competitive market -- where international player Foodpanda and Alibaba's local concern Hungrynaki already offer huge markdowns -- Shohoz may have lagged behind.

The struggle for the third spot is also uncertain as Pathao Food still has a dog in the fight for second place.

Earlier in June last year, anticipating the dominance of the giant food delivery specialist Foodpanda in the market, even Uber Eats shut its doors to the market.

"As one of the pioneering players in the tech ecosystem, Shohoz continues to evolve to make life easy for the people of Bangladesh. Our board is reviewing our strategic vision with the current verticals and future potential ones," Shohoz responded to The Business Standard's query on whether they would exit the market.

The new verticals

Shohoz is continuing its exploration of new fields for multiple revenue streams.

In May 2020, it opened Shohoz Health, where several healthcare-focused startups, like Prava Health, are flourishing owing to foreign investment.

In June this year, Shohoz also launched its education technology platform Shohoz Learn.

Like many other consumer tech startups, Shohoz is also trying to expand their reach in the Fintech area, said its founder.

"We will continue to innovate to solve core problems where tech can bring convenience," the company said.