Roshni Rides: Pricing Transportation for the Underserved

by: Can Uslay

Publication Date: May 16, 2018
Length: 22 pages
Product ID#: 5-101-361

Core Disciplines: Base of the Pyramid, Entrepreneurship & Innovation, Marketing/Sales, Social Impact, Strategy & Management

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Description

First place winner of the WDI 25th Anniversary Case Writing Competition in 2018. 

In 2017, the $1 million Hult Prize was awarded to a team who created the Roshni Rides start-up aimed at providing dignified transportation to refugees. Yet many challenges remained as they prepared for launching the business in Orangi Town, Pakistan, with pricing a chief concern. Their plans called for a lean start-up mode in year one and projected serving 2.2 million commuters in 20 cities in five years. The price point for a ride had to be sufficiently low to attract the refugees, yet high enough to demonstrate viability and generate a positive cash flow to enable expansion. Roshni Rides’ mission was to provide accessible, reliable, and affordable transportation to refugees, but the team had to decide what price point would provide the best balance between impact and return. The team had conducted consumer surveys and developed estimates to help them determine the best pricing. CEO Gia Farooqi also had to take the price and cost implications of Roshni Rides’ marketing plan into account to see if becoming self-sufficient after year one was desirable, or even possible.

Teaching Objectives

After reading and discussing the material, students should:

  • Conduct a SWOT analysis.
  • Analyze the value proposition of a start-up using the Business Model Canvas.
  • Use the chain ratio method to estimate market sales potential and sales forecasts.
  • Calculate the break-even volume and estimate bottom line impact of different price options.
  • Estimate impact of retail price changes on the bottom line.
  • Prepare pro forma income statements based on a marketing plan and other budgeted expenses.