By: Mehek Usuf
Popular bus service SWVL, announced its decision that SWVL will stop working for intercity travel vertical in Pakistan on November 17 and laid off staff. On November 18, the company decided to completely wind up its operations, shutting down the TaaS (transport-as-a-service) vertical. Individual riders could commute on SWVL’s buses for intracity travel under the retail model.
Under the TaaS model, SWVL provided customized services for corporate clients such as businesses, schools, and other customers that operate their own transportation programs.
The service informed SWVL travel rides (city to city) and business rides (business to business) are being shut down. The company went on say it had started its journey in July, 2019 with the mission of solving major problem of transportation of citizens face in their daily life. SWVL offered having comfortable and affordable means of transportation. But now due to global economic and investment crises they are shutting down their operations and services country wide.
SWVL operated three business verticals in Pakistan. Individual riders could use SWVL buses for intracity travel under a retail model. SWVL retail bus service suffered a major downfall during the economic crises hit the world.
Few months back, June, 2022 SWVL paused their operations in the major cities within Karachi, Lahore, Islamabad and Faisalabad. But SWVL Travel rides (city to city) and SWVL business rides (business to business) were fully operational. But now on November they have laid off their staff and completely winded up all the services.
SWVL had been following a high cash burn model, and its financial position had been precarious. SWVL posted net losses of $161.6 million for the six-month period ending June 30, 2022. The company was running negative operating cash flows of $76.8 million for the six-month period of 2022.
SWVL derives the bulk of its revenue from Egypt, Pakistan, Kenya, Saudi Arabia, Jordan, Argentina, and Turkey. Last month, SWVL announced that operations in only five of its top 10 countries by revenue turned adjusted EBITDA positive or breakeven in August 2022.
The company has been on the road to profitability and hopes to be cash flow positive by 2023.
The company did not give any reason but a source from SWVL told that company has to took this unwanted decision due to global downturn in investments. Mustafa Kandil, the CEO of SWVL, did not respond to a request for comments on shutting down operations in Pakistan.