BUSINESS MODEL INNOVATION IN DIGITAL MOBILITY PLATFORMS: AN ANALYSIS OF REVENUE MODEL STRATEGIES IN PAKISTAN’S CASH-DOMINANT ECONOMY

Abstract

The adoption of digital mobility platforms has greatly transformed the transportation system in cities because it introduced the delivery of convenient services through mobility on demand. Nevertheless, in an economy where money is conventional means of conducting transactions such as in the case of Pakistan these platforms encounter special business and financial challenges. The use of cash payments remains a challenge of real-time fare collection, user behavior data as well as revenue reconciliation. This research paper examines the ways platforms transform their business models to deal with these limitations and how the platforms can become sustainable without entirely switching to digital transactions. In Pakistan, most of the citizens have not access to the banking system, and the digital payment penetration is low because of low levels of trust, weak financial literacy, and fintech platforms. As smartphone penetration continues to increase and more people have access to mobile internet, digital mobility platforms are not able to scale as the conventional revenue strategies devised in more digitally mature markets. The study seeks answers on how companies like Careem and Bykea have innovated to offer hybrid models that allow paying both in cash and digital currency to keep users and promote the gradual acquisition of digital technologies. This paper will evaluate how effective these hybrid strategies prove in managing the customer expectations alongside with efficiency of operations. It also looks into the role of user preference, driver preference and level of trust and incentive program in long term compliance to the platforms. The results have shown that behavioral components contribution to platform loyalty involves perceived control over cash and mistrust over the digital systems to a reasonable extent. Dynamic pricing and flexible options of handling payments, digital rewards-based incentives are listed as important elements to adjust to the local market. Finally, the study is an informative contribution to the business models innovation in cash-based contexts. It points to the significance of trust-building, user-centered design, and regulatory facilitation of the promotion of financial inclusion by the use of the digital mobility platform. The paper infers that the gradual shift in the mobility industry cash to digital ratio would be more feasible and sustainable in the case of Pakistan as the hybrid systems provide the smoothest route to increase revenue and retain customers in a changing economy.