Pathao Company

Industrial dispute in our

country
Presented
Tarek Ur Rahmanby 182-11-658
Rafid 182-11-656
Papon Sarkar 182-11-653
Shankar Saha 182-11-642
SM Jamian Ananta 182-11-659
Introductio
n
One of the most popular ridesharing firms in Bangladesh, the media reports
about Pathao cutting the jobs surfaced in the beginning of this week. Those
who lost jobs included top officials of different Pathao departments,
according to the reports. As of 25th June 2019, approximately 300
employees, including mid-level executives and some departmental heads,
were laid off without any notice. There was another dispute between
company and employers. That is A group of bikers providing ride-sharing
service to the public on behalf of Pathao has started preparations to launch
a protest against the company.
 Why that was
happened?
Several people related to the sector said the company had to
squeeze its manpower as it failed to secure a possible foreign
fund in time. The finance department of Pathao told The Daily
Star that the layoff was due to investors backing out from the
upcoming investment round, leaving it with only a few months’
worth of funds to run the company. The top management had
tried to raise $100 million from new investors but the effort went
in vain, the sources said.
 Historical Background of Pathao in
Bangladesh
Pathao is one of the most successful ride-hailing companies in Bangladesh. Founded
in October 2015, from a tiny operation, the company has grown to become one of the
most important ride-hailing companies in Bangladesh over the last few years. Pathao
was a logistics company first before moving into bike sharing. After getting huge
success in Bike Sharing and Huge Funding, in my opinion, Pathao should've focused
on its Logistics wing. Instead of moving into Food Delivery or even Car Sharing.
Pathao operates services in three main cities of the country – Dhaka, Chittagong and
Sylhet. Besides ride-sharing services, it has ventures in e-commerce, merchant, courier
and food delivery services.
Causes of Industrial Disputes in
Pathao
When employees were being laid off, they were told it is because the company doesn’t have
investment and is unable to generate revenue,” said one ex-employee who held a high-level
position within Pathao. Other ex-employees mirrored the same comment, all confirming that
Pathao is being unable to generate revenue.
Other dispute was Currently, the company requires their employers to pay 20 per cent of the
fare to the company as a commission. A group of bikers providing ride-sharing service to the
public on behalf of Pathao has started preparations to launch a protest against the company.
 Pathao downsizing on fund
shortage
Pathao, a ride-hailing company and one of the fastest-growing tech startups in
Asia, cut more than 50 percent of its workforce in the last two days as it
struggles to raise funds amid waning popularity for its services. According to
several sources, nearly 300 mid- to top level employees, including the head of
Pathao Food and Ride Core Service, were terminated.
Senior executives from Chattogram and Sylhet were also forced to step down,
said the employees who faced the fate.
 Company
Complication
Pathao does not deliver products which weigh more than 2 kgs. That means
they deliver only lightweight products. Also, they do not transport any kind
of documents such as passport, ID card or any sort of thing like that
because if any kind of damage happens, they won’t take the responsibility
for that. Secondly, Pathao bikers don’t use logos and it becomes hard for
customers to track them. Thirdly, Pathao has not expanded its services to all
the areas of Bangladesh.
 Employees
Protest
6 months ago, hundreds of riders affiliated with Pathao have been
protesting, demanding better benefits and a wider safety net for
riders. Protestors have put forth an 11-point demand, which among
others, asks the company to meet the following demands: reduce
Pathao’s commission from 20 percent to 8 percent; provide proper
Breaking News : Pathao sacks 300 employees
insurance coverage; stop penalizing and suspending riders without
prior notice; provide a toll-free number for riders; and exempt
riders from donning the company-mandated ‘protective gear’.
 Major Challenges Faced by
Pathao
Business is full of challenges and every business have to face it and over the time through strategy
and market intelligence every business brings solution to its own challenges and improve gradually.
Pathao is not out of it, though it is the most popular brand in Bangladesh still it is facing challenges
that is making its business more and more competitive. The Challenges are -

Over Demanding Safety Ride

Consumers Issue
Local Gender
Competitors Issue
Global Working
Competitors Hours
 Research and
Development
Disruptive technology is a major concern for any kind of business. Pathao
is proving delivery service however in western country this kind of
service is planned to done by drone. As this has not become so popular
due to its huge cost but more research is been done to prevent this cost.
On the other hand, Bangladesh is not preparing for drone delivery service
but in future it can be as it is growing day by day.
 Conclutio
Keep in mind that most of the growth companies died because of hiring - or wrong strategy

n
of hiring. Start-ups die because they run out of money, and the biggest cost is the human
resource.
We think with $10 m investment, Pathao hired too many people and the company is not
able to pay its employees properly. As a result, Pathao laid off 300 employees. Basically,
every company has a dispute between the owner and the employees. There are some
similar disputes between Pathao. This dispute will not last long if the owner can arrange
their funds and pay their employees on time. In another matter, the owner must take into
his mind that no one can be fired from the company without a reason and without notice.
Then Pathao will be able to prevent disputes between their owners and employees.
 Refferen
ce

Dhaka the daily star bdnews24.co the business

tribune m standard
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