As the economy is in great turmoil these days with increasing prices of petroleum and high inflation in countries all around the world, it is getting more difficult for the citizens to sustain a better level of survival. When people cut off their expenses, there are many other businesses whose demand increases, and they flourish. Like during Covid-19, the IT industry including many IT businesses and freelancer businesses prospered. In this time of increased petroleum prices, many people are quitting the use of their personal transport and shifting towards public transport. This provides a great opportunity to the public transport companies like SWVL which grabbed the customer inclination towards public transport and is providing the transport service more efficiently.
SWVL, a savior in high petroleum-priced economy
SWVL operates on a similar model as Uber works worldwide using taxis, SWVL runs its own private buses and hence, is a ride-hailing platform for people who cannot afford their own personal cars and also for those who want to relax during the drive and reach their destination without driving the vehicle. The target customers of SWVL include schools, businesses, and individuals. The company offers a comfortable ride to more flexible routes and has bendable schedules.
About the falling economy, Chief Financial Officer Youssef Salem was asked a few questions in an interview and he expressed his views:
“For us, there are two major impacts from the oil price and inflation. One, very positive operationally, and one very challenging from a capital markets perspective.”
The company went through the oil and sailed out with effective strategies and policies. It preferred to cut headcount in a few countries like Jordan, Argentine, and Kenya, and in a few other countries raised the fares from 10% to 20% to cope with the increasing commodity prices. In many countries, the fare prices have increased to 40 % than when it started its operation in April after the merger with Queen’s Gambit Growth Capital. Its share price has also deteriorated by more than 75% due to the interest rate hikes and the dwindling economy. Salem explains the market situation in the following words
“As the cost of borrowing increases, the capital available for high growth stocks like ourselves becomes more limited and expensive,”
Recently as people are moving back towards public transport, SWVL has grabbed the opportunity and has started earning well in a few areas of Egypt and Pakistan.