Submitted to-

Raihan Sharif (RSH3)

Lecturer, Department of Management
North South University

Submitted by:
Group: SIX

Name ID
Md. Kamrujjaman rafi 1620258030
Khaled Mahmud Sultan 1610724642
Md Mehedi Hasan 1620301030
Jakaria Hossain Shajid 1621829030
Tasnim Zaman Mridula 1731018030
Afsana Hossain Hashi 1731293630
 Synopsis

Fasten is a ridesharing company that provides the mobile platform to connect drivers in their own

personal vehicles with people looking for a fast and convenient ride around Boston. Kirill

Endakov the founder of Fasten, Vlad Christoff COO of Fasten and Roman Levitskiy CMO of

Fasten were pleased with the progess and growth of their services in which drivers were charged

$0.99 for each ride they provided compared to the 20%-30% commission other ridesharing

companies charged their drivers. As many competitors were there, Endakov and his team had to

decide the better ways make profit by analyzing the market and the competitors. The advent of

modern mobile smartphone technology gave users access infinity information and services at their

fingertips. Mobile app developers created platforms to connect users with content such as news

cames mobile banking capabilities and GPS locations and directions. As a result, the mobile

ridesharing industry emerged. Anyone with a smartphone subscribed to the app could request a

ride from drivers within the network and would be provided the name, contact information, car

and license plate number of a driver who would arrive for pickup within minutes. The rider and

driver then rated each other based on any number of subjective and personal criteria. Drivers could

refuse requests from riders with low ratings likewise riders could also cancel a ride that was

accepted by a driver with low score. Before ridesharing apps, passengers’ road-based ride choices

in the U.S. were limited to traditional livery services. Although some taxi drivers accepted credit

card payment, typically taxis required cash payment because many drivers were unwilling to pay

the additional credit card processing fees. This was both inconvenient and confusing for passengers

to know what were acceptable methods of payment. By 2015, when Fasten’s cofounders were

ramping up to launch in Boston, the US ridesharing industry comprised three major competitors -

Uber, Lyft and sidecar. Uber was first to offer ridesharing to the general public in June 2010 to
connect customers in San Francisco. In 2012, Uber presented a more affordable alternative to its

Uber Black Car Service: UberX (A service that connect users with non-professional drivers in

their own cars however the company intended to maintain its luxury brand image and kept its black

car service option by continuing to offer the Uber Black option to customers. Both of the

companies Uber and Lyft sought to expand into new cities and to grow within those they had

already entered. Uber launched a “Shave the Stache” campaign urging Lyft customers to try Uber’s

service instead. Uber unabashedly recruited drivers from Lyft (A process called “Operational

Slog”) by having Uber representatives request Lyft rides on fake accounts and then encourage the

drivers to switch to Uber during the course of rides conversation. As a result, many drivers began

multi-homing. Both companies also repeatedly hired contractors to sign up as riders and then

request and cancel thousands of rides on the competitor’s app, dragging drivers away from real

requests only to be subsequently dropped. Both companies were forced to cut base rates to attract

new riders which effected their own revenues and reduced drivers’ potential income. For hiring

new drivers, Uber initiated a car leasing program in late 2013 and a revamped version of the

program in 2015. Despite competitive pressure to lower fares to fight for leadership both of the

companies introduced a pricing scheme that would drastically inflate prices at certain time. Ubers

Surge pricing and Lyft’s Prime Time pricing went into effect during peak demand. Not only the

price were increases unnecessarily but also the practice did not balance supply and demand. The

COO of Fasten argued that drivers would respond to the Surge by heading to areas of high demand

thus creating insufficient supply in other surrounding areas. He also added that all the drivers were

trying to chase the Surge in a certain area. Then the Surge goes away but they’ve exposed other

areas. Uber and Lyft Prime Time create an incentive to optimize for the platform’s revenues not

for marketplace balance. Christoff also claimed that incentivizing drivers with higher rates at peak
time is a fair game. On the other hand, both companies introduced another lower cost alternative

for their riders, which more closely embodied a carpool ridesharing model as Uber Pool and Lyft

Line gave users the option to request a ride and be paired with another rider heading in the same

direction. By this, passengers split the cost with the other riders in their car. On the contrary, Uber

raised the percentage they charged new drivers from base 20% to 25% in major cities and by 2015

up to 30% for an experimental group of drivers in San Francisco and San Deigo. For Fasten

ridesharing had been a part of their culture for decades. The cofounder of Fasten had jumped at

the opportunity to launch the first successful and consolidated transportation network company in

the world. He also added, Uber reported to have completed 140 million rides worldwide in 2014

but Saturn (Another ridesharing company in Russia) completed 100 million in just one country.

The Russian market is much bigger than the U.S. but the U.S. market has much bigger potential.

The COO of Fasten said that Uber and Lyft helped them a lot because a lot of people are using

ridesharing services that’s why they don’t need to convince drivers to drive with passengers. By

September 2015, Fasten’s founders were ready to launch and charged drivers a flat $0.99 so that

every driver would pocket the rest and that’s how they were attracting the drivers. According to

fasten’s leadership team, charging drivers a flat fee rather than a percentage of the ride’s fare not

only supported the company’s vision of transparency and fairness but also aligned incentives

between drivers, riders. As other ridesharing services are interested in percentage-based income

that became a good opportunity for Fasten to boost their service and they can make more profit by

giving drivers a flat rate. They didn’t spend much for marketing. They use their own advertising

agency for marketing “Rutorika Digital Agency” (one of the top Russian Digital Design

Marketing Company). They recruited only hundred drivers at first and offered their drivers a flat

rate of $0.99 to attract more drivers. Then 90% of the drivers were immediately convinced and
signed up to drive Fasten. Their methods were proved effective. The founder of Fasten said that,

In Russia, it is very easy to start a ridesharing company as there have several platforms. The biggest

technical challenge is in the U.S that’s why fasten had to invest heavily in software development

to compete in the U.S. In U.S it is almost impossible to hire someone qualified as every qualified

person in U.S expect higher salary. Fasten’s leadership hired a team of qualified Russian based

developers which built a scalable platform with global growth in mind less than a year. On the

other hand, the process of application for Fastens drivers were very straightforward. Potential

drivers filled out an online application with basic information, agreed to a background check,

confirmed a clean driving record. Once this process was completed and the background check

came back clean, the driver could download the app and begin driving for Fasten. For drivers,

Flexibility was a key attribute to the mobile ridesharing system. With the in-app rating system,

Fasten could easily screen and regulate poor performance resulting from drivers abusing the

flexibility of the model. With the Fastens app, passengers enjoyed all the same services as with

competing apps and the app also showed the instantaneous price meter during the ride. Fasten did

offer a similar but arguably fundamentally different higher cost, optional feature called Boost and

because of Fastens flat fee model, the full additional Boost premium was passed on to the driver.

Endakov the founder of Fasten said that their passion is to be transparent and fair. The intense

rivalry between Uber and Lyft, Sidecar struggled and was unable to raise the same level of capital

that Uber and Lyft could. But by December 29 of that year, the company announced it would

discontinue offering rides altogether. Smaller companies entered in selected cities during this time.

For example- An Israel based company Gett was the largest ridesharing company in Europe. A

London based company, operated in European and American cities. By Spring of 2016, Uber

operated in 404 cities in 60 countries and Lyft operated in 207 cities in North America and by this
ridesharing popularity grew internationally. Uber’s closest competitor in over 80 cities in India

and the dominant ridesharing service covering over 300 cities in China. Uber reported that it had

booked 169 million rides worldwide in March 2016, 50 million of which were in the United

States. The CEO of Uber came to an agreement with Didi Kuiadi (A Chinese ridesharing

company) for the native Chinese company to purchase Uber China for $1 billion.

Naturally, the foremost obvious resistance facing new ridesharing apps came from the incumbent

taxi services among cities that feared the new models would encroach on their business. The

dominant share of road-based transportation for business travel shifted removed from ancient taxi

services and toward the ridesharing model, with ridesharing reordering taxi services within the

United. We’re at a degree wherever the tide has turned, same Christ off. Consumers have spoken

with their wallets and say, ‘would I rather use rideshare in someone’s personal vehicle clean and

courteous or some unstable, battered police attack aircraft used as a cab? Contention from the taxi

business junction rectifier to violent protests in some cities in European nation, France, Spain, and

also the Uk. By Gregorian calendar month 2016, the Arrow network enclosed one, 200 town taxis

in capital of Massachusetts alone, over half the native fleet. Francisco railroad Transit Authority

and also the Public Utilities Commission of California, with a threat of up to $5,000 per instance

of operation and jail time. Between 2014 and 2015, Uber was concerned during a range of lawsuits

within which drivers claimed they were staff and were entitled to sure advantages, like the correct

to earnings, overtime, meal breaks, compensation of business expenses and social insurance. In

most instances, courts sided with Uber in driver employment legal battles. Several drivers for a

few reasons set that they’d create additional by being staff, however they're going to not. It can

become a really dearly-won system to support all the drivers. Someone must pay those advantages,

and {it can it’ll} be the riders—ride costs will go up as a result of that’s the sole supply of revenue
for the corporate and, as a result, drivers can create less per hour. » Fasten believed that drivers

valued the flexibleness that had in operating for over one company. Advanced code and electrical

systems had made-up the approach for innovative automobile technology capabilities, together

with control, antilock brake systems, driver help, lane assist, and blind-spot and rear video

cameras, that had been incorporated into vehicles since the Seventies. Established automobile

makers like Audi, BMW, GM, Mercedes, Nissan, and Volvo had every proclaimed work on self-

driving cars however developments from geographic area school firms Google, Tesla Motors, and

Apple were the objects of abundant of the public’s excitement .Uber and Lyft began investment

heavily in autonomous vehicle technologies .Lyft entered into a partnership with g, whereas Uber

began operating with Carnegie financier University AI specialists and alternative high automobile

researchers. Evolving Offerings Uber and Lyft continuing competition on worth and services.

While Fasten gained prominence in capital of Massachusetts and contemplated its enlargement

strategy, news of bother in capital of Texas, TX unfold. The voters within the town backed a live

that will need additional tight, fingerprint-based criminal background checks for rideshare

companies’ drivers. Uber and Lyft had lobbied laborious to overturn the capital of Texas

ordinance, defrayal $8 million put together. However instead of adhering to the ordinance, the 2

firms set to indefinitely suspend operations in capital of Texas, effective could nine, 2016.Fasten,

like several alternative smaller rideshare firms, jumped at the chance to fill the gap. By June 1,

2016, Fasten had approval to control in capital of Texas and started operations. The corporate

offered a promotion for brand new capital of Texas drivers that born the $0.99 flat fee per ride for

a month. The corporate had recruited thousands of drivers in its initial period of time, arrival times

for passengers averaged but 5 minutes, and over eighty % of riders came back.
 Fasten Swot analysis
Strength:

⚫ Pricing strategy : Where Uber and other ride sharing companies use commission based pricing,
Fasten charges their drivers a flat $0.99 bill per ride.

⚫ Low operational cost: Operational cost is quite low. As it relies on customer-to-driver

interaction, a dispatcher is not needed.

⚫ Convenience : The system is convenient for the drivers. They can work flexible hours and
even choose to be a part-time employee. Drivers can also reject unwanted clients.

⚫ No full time drivers : No need to pay drivers monthly a huge amount and wait for the money
to come back.

Weakness:

⚫ Highly paid programmers from silicon valley: To operate in the US, they need high quality
programmers to deal with the heavy client. But their wage is way beyond than the owners
themselves.

⚫ Privacy Invasion: There are privacy concerns. These apps record where customer gets the ride
from. It also notes where he goes with it.

⚫ Dependency on drivers: The rate usually depends on the volume of available cars around the
passengers. If there isn’t enough Fasten cars available, the ride price goes high.

Opportunities:

⚫ Satisfied Drivers : Fasten gives drivers a scope to earn more than other ride sharing platforms.
The owners claim that they think the drivers deserves more because they are doing all the
work.

⚫ Replacing Taxi business: The prices are lower compared to traditional taxi operators.

⚫ High valuation in the market : Many people are ready to invest on it, means Fasten has a
valuable market share in the industry.

Threats:

⚫ Competition : Existing competition. Such as- Uber, Lyft, Sidecar.

⚫ No political barrier to new entrant: Since, there’s no barrier on new entry, many would be
encouraged to enter. Increasing competition will ultimately decrease prices. This will
 discourage drivers from joining the startup in new markets. This will result in loss of
customers. Fasten’s revenues will decline.

⚫ Self driving car and autonomous cars in the near future : If fasten doesn’t respond to the future
threat, they might lose valuable market share.

Fasten Pestle analysis

Political:

To properly appraise the extent of the overall systematic political risk that Fasten may be exposed
to, the following factors should be considered before taking part in any investments.

⚫ The trade barriers.

⚫ The level of political stability that the country has in recent years.

⚫ A high level of taxation would demotivate companies.

Economical:

The economic factors that Fasten may be sensitive to, and in turn should consider before investing
may include the following:

⚫ The rate of GDP growth in the country will affect how fast Fasten is expected to grow in the
near future.

⚫ The interest rates in the country would affect how much individuals are willing to borrow and
invest. Higher rates would result in greater investments that would mean more growth for
Fasten.

⚫ However efficiently the financial markets operate also impact how well Fasten can raise
capital at a fair price, keeping in mind the demand and supply.

⚫ A high level of unemployment in the country would mean there is a greater supply of jobs
than demand, meaning people would be willing to work for a lower wage, which would lower
the costs of Fasten.

Social:

The social factors that affect Fasten and should be included in the social aspect of the PESTEL
analysis include the following:
⚫ The demographics of the population, meaning their respective ages and genders, vastly impact
whether or not a certain product may be marketed to them

⚫ The class distribution among the population is of paramount importance

⚫ Fasten needs to be fully aware of what level of health standards, reactions to harassment claims
and importance of environmental protection prevail in the industry as a whole, and thus are
expected from any company as they are seen as the norm.

Technological:

The technological factors that may influence Uber may include the following:

⚫ Fasten uses technology to provide people what they need or want and when they want it. Now,
Fasten has managed it so well that one can call the nearest cab within few minutes. So,
technology is one of the very important factors driving Fasten’s fast growth.

⚫ Since it’s an app based business, this app is incredibly important to Fasten. It can’t function if
the app goes down or suffers difficulties. The company must ensure everything is working,
reliable and ready to go.

Legal:

The legal factors that deserve consideration include the following:

⚫ Intellectual property laws and other data protection laws are needed to be followed.

⚫ Discrimination laws are placed by the government to protect the employees and ensure that
everyone in Fasten is treated fairly and given the same opportunities, regardless of gender,
age, disability, ethnicity, religion or sexual orientation.

⚫ Health and safety laws were created after witnessing the horrible conditions that employees
were forced to work in during and directly after the industrial revolution. Implementing the
proper regulations may be expensive, but Uber has to engage in it, not only due to the law but
also out of Fasten’s personal feeling of ethical and social responsibility to other human beings.

Environmental:

The environmental factors that may significantly impact Fasten include:

⚫ Uses of electric and hybrid cars can give fasten a competitive advantage.
 Porter’s five forces
In order to have a better understanding of Fasten’s potential for growth in the transport industry
requires the use of Porter’s Five Forces Analysis. These five forces will help in mapping the
different competitive forces that hinder Fasten’s growth. The strategic application of Porter’s five
forces helps Fasten’s managers to have a better understanding of the rivalry among existing players
in the transport industry, the bargaining power of its buyers, the negotiating powers of its suppliers,
the threat of new entrants into the transport industry, and finally the threat of substitute products
and services.

⚫ Bargaining power of buyers

Where buyers are powerful, profits are generally lower. Buyer power can lead to lower prices or
having to increase costs by adding features, services, quantity in order to sell. Where sellers have
too much power over buyers opportunities can emerge for others.

⚫ Bargaining power of suppliers

Where suppliers are powerful they may make a larger profit margin than the company that
integrates the inputs of several supplier to sell to the end customer.

⚫ Threat of new entrants

Winners attract others that wish to get a share of their success. A company that makes above
industry-average profits will face the risk of new entrants that may either imitate bluntly or come
up with similar or even somewhat better value proposals. This threat alone can keep a lid on the
achievable profits. It may lead to having into continually add to the original value proposal with
limited ability to increase prices.

New entrants will add new capacity, thus supply, to the market which will reduce prices.

⚫ Threat of substitutes

Substitutes satisfy the same basic or economic need using a different technology. There are many
things that compete for your recreational time which may be suitable to substitute each other. In
this case, the substitutes may be coming from an entirely different industry. Developing a simpler
substitute that scores better on the price-performance trade-off can be a great starting point for
innovators. This is particularly true if you are looking developing a substitute for high-profit
industries or where products have outstripped the user’s typical requirements.
⚫ Rivalry among existing competitors

Rivals like Uber, Lyft are always putting fasten in a position to perform with perfection. Such as -
Letting go of huge profit by making a flat rate of $0.99 per ride is one major step for Fasten to
sustain against the rivals.
After the recent fundraising round, Evdakov considered his next steps for growth.

1. With such success in Austin, should Fasten expand more rapidly to

other U.S. cities and globally?

A new ridesharing start-up in Boston entered in the ridesharing industry in September 2015 with

a very unique and transparency for both driver and riders. Their aim is to keep rider’s fare lower

than their competitors and charge drivers a flat $0.99 per ride but their competitors charging 20-

30% commission. This strategy helps them to differentiate them from their competitors like Uber

and Lyft. Uber and Lyft has valuation of $50 billion and $5.5 billion not only that they also invest

to hire software developers. The number three competitor Sidecar was out by January 2016 for

uber’s aggressive marketing strategies, and cutthroat poaching practices. Fasten must ensure its

core IT services and their word-of-mouth approach to attract drivers and riders.

Strength and Weakness of fasten:

Strength Weakness

Charge drivers a flat $0.99 per ride Little experience of international

market
Simply and easy business model Low profitability

They offered Boost against Surge and The company is not as well-known in the U.S.
prime time rates which draws in as companies like Uber and Lyft
customers and tends to cause word-of-
mouth advertising
Differentiates itself by treating its Higher pay rate
drivers as customers

Fasten is doing good in their business. They attract new customer with a very little amount of

investment but also their marketing budget was only $150,000. They should expand more rapidly
to other U.S. cities and globally. Growing market size is one of the major opportunities for them.

Their big challenge is to maintain good relationship with their loyal customer and also attract new

customers. They need to have access to international talent in global market. For don’t have proper

investment, fasten have limited access in high level talent market. In Russia it’s very easy to run a

ridshare company. They don’t have to develop a rideshare software. But In USA, the biggest

challenge is to develop the sophisticated back-end application capabilities. For that they need

skilled programmers. In USA a skilled programmer from Silicon Valley expects a salary that is

higher than Evdakov, levitskiy and Christoff. When they expand their business globally, they’ll

have a much more access to the high-level talent market.

Opportunity of fasten:

• Potential market

• Increasing smart phone user

• Innovative service

In near future fasten can use machine learning and Artificial Intelligence to operate efficiently and

in lower cost. For globalization, Fasten has advantages for capture the market share because it

will be less depended on domestic revenue. Fasten can enter new market and reach to customer

with very low marketing budget through social media. So, we can conclude with such success in

Austin, Fasten should expand more rapidly to other U.S. cities and globally.
 2. Should the team invest in better analytic and programming capacity to
offer riders services that had become standard with Uber and Lyft?

Fasten has super loyal customer not only that with superior product and services quality will help

fasten for increasing their market share. We all know about Nokia. Market leading mobile phone

manufacturing company. Innovation is the main reason why Nokia failed. They couldn’t

understand the market demand. They manufactured lots of phones, but ignored the innovation.

Fasten should invest in better analytic and programming capacity of offer rides services that

standard with uber and Lyft. Developments in Artificial Intelligence is a major opportunity for

fasten. It will help them to predict consumer demand, niche segments, and make better

recommendation engines. One of the major threat is Self driving car and autonomous cars in the

near future : If fasten doesn’t respond to the future threat, they might lose valuable market share.

Rivals like Uber, Lyft are always putting fasten in a position to perform with perfection. Such as -

Letting go of huge profit by making a flat rate of $0.99 per ride is one major step for Fasten to

sustain against the rivals. So, to keep the situation to their favor, it is very essential to increase

their service quality or at least maintain the industry standard. So, fasten should invest in better

analytic and programming capacity to offer riders services that had become standard with uber and

lyft.
 3. What should Fasten’s strategy be to prepare itself for the ostensibly
impending of autonomous vehicle technology?

Autonomous car is one kind of vehicle that can guide itself without the human conduction. This

kind of vehicle has become a concrete reality and may pave the way for future systems where the

computers will take over the art of driving. An autonomous car is also known as a driverless car,

robot car, self-driving car.

Autonomous cars usually rely on sensors, actuators, complex algorithms, machine learning

systems, and powerful processors to execute software. Radar sensors does monitoring the position

of nearby vehicles. Video cameras does detecting traffic lights, read road signs, keep track on other

vehicles, and look for the pedestrians.

The benefits of Autonomous cars are they can reduce traffic deaths, drop the harmful emissions,

eliminate stop-and-go waves by 100 percent, 10% improvement in fuel economy, 500% increase

in lane capacity, 40% reduction in travel time and also consumers savings for £5bn.

Fasten provides riders with convenient, less expensive, and also safe taxi service. With the touch

of a button people can hire drivers to pick them up and take them to their destination. Fasten, Lyft,

and Uber provide their employees with decent pay, the flexibility to be their own leader, and the

ability to work as much or as little as they desire. Fasten differentiates itself from companies such

as like Uber by treating its employees as customers and offering them higher pay rates than those

offered by the Uber, Lyft and other competitors.

Fasten had approval to operate in Austin drivers that dropped the $0.99 flat fee per ride for a month.

Fasten’s success grew rapidly in Austin. Company had recruitment thousands of drivers in the first

two weeks. After 4 months of operations in second city, in October 2016 Evdacov announced
Fasten had become profitable. After the recent fund raising round Evacov considered his next step

of growth.

The Fasten’s strategy be to prepare itself for the ostensibly impending advent of autonomous

vehicle technology is they need to keep their eyes open on where their competitors are investing,

as Uber and Lyft began investing heavily in Autonomous vehicle technology. Lyft entered into a

partnership with GM while Uber began working with Carnegie Mellon University robotics experts

and other top car researchers.

-Fasten had to invest in software development to compete in the US. They need to be more

experienced to set up the software platforms.

-They need proper knowledge about the US Market and also have to be well known in the US

Market.

-Fasten would need to deploy the strategy of continuous innovation and market intelligence in

pricing, technology, and also personnel to take over market.

This is how Fasten can prepare itself for the ostensibly impending advent of autonomous vehicle

technology.