With the help of PESTLE we can analyze the external situation of Pathao. It can provide a deeper understanding of the business and help to identify the macro-environmental factors which may affect Pathao.
Political: Initially, there was no government regulation regarding ride sharing application. It took around 6 months to make the draft rules. But the draft rules were not made in a full proof way and thus important aspects were ignored. BRTA committee that constituted the rules did not consult with experts, the companies or even the stockholders.
Also, the ministry could not scrutinize it correctly. Hence, Pathao faced some government related issues at the beginning (Ahmed 2017).
Economical: According to (Islam & Rahman 2019), many investors backed out from investing in Pathao due to economic problems in Bangladesh. Due to lack of fund raising, Pathao had to cut more than 50% of its workforce. Around 300 mid to top level employees were terminated. Moreover, due to being a less developed country, most customers desire for offers at a low price.
So, Pathao had to ensure that they are providing the best services at the lowest possible price. But sometimes, drivers were very poorly trained to cut costs and their cost effective strategy backfired.
Social: At the beginning, the concept of ride sharing app was new to the people of Bangladesh. Especially women, face a lot of problems and harassments in public transports. When Pathao started, many women didnt prefer to get on the bike or car as the drivers were absolute strangers.
Due to this strong social norm of public transports not being safe, Pathao faced a lot of issues in the early stages.
Technological: Customers alleged that some drivers were charging extra fares and taking detours. A Pathao customer Muhammad Asif Imran shared his personal experience where the rider demanded a higher fare at the end of the ride. The rider said that the app sometimes shows incorrect readings (Chowdhury 2017). Therefore, Pathao faced technological issues such as wrong route for the destination, GPS problems, wrong fare shown in the app, etc.
Legal: Pathao was said to have faced many legal controversies due to lack of maintenance of regulations. Supreme Court lawyer Tanjim Al Islam sent a legal notice to Pathao Limited on charges of irregularities. It is said that Pathao illegally charges extra money from customers. They also faced some legal issues for poorly trained drivers. Moreover, during 2018, a Pathao rider was arrested by the RAB on charges of drug peddling (Rahman 2018).
Environmental: Due to poor drainage system in Dhaka city, the roads get flooded whenever there is heavy rain. As a result of this environmental condition, Pathao drivers cannot provide services on time.