Fetchr business model

For the exclusive use of j. huang, 2019. 9 -1 1 9 -0 1 8 REV: MAY 1, 2019 V.G. NARAYANAN EREN KUZUCU Fetchr: A New Way of Last Mile Delivery Idriss Al Rifai, founder and chief executive officer (CEO) of Fetchr, was stuck in traffic in the Deira district en route to the Dubai International Airport. He was frantically rummaging through his luggage, searching for the passport he could have sworn he had packed. Now it was clear he had not, so he pulled out his phone, opened the Fetchr app, and asked to have a driver collect his passport from his office and deliver it to him at the airport in time for him to catch his flight. Just a week before, a colleague realized she did not have her laptop when she arrived at a client’s office to make a presentation. She used Fetchr’s NOW, the company’s customer-to-customer (C2C) service that had been launched two years ago and only accounted for a fraction of Fetchr’s revenues, and her laptop arrived just in time for her presentation. Fetchr’s roots were in MENA360, a technology-based delivery and logistics company in the United Arab Emirates (UAE) that served both businesses and individual consumers via its mobile app. Founded in 2012 by Idriss Al Rifai, the venture was later rebranded as Fetchr. He had realized that delivering and receiving packages could be a frustrating experience. One of the reasons was that most homes and businesses in the region did not have formal street addresses, so it could be tricky for drivers to find the location where they were supposed to deliver. When it came to payment, most customers paid cash-on-delivery (COD), which meant someone had to be physically present at a particular address to receive the package and make payment in cash. Al Rifai wanted to simplify the process and create a customer-centric technology-based solution. Over the years, he grew its product and Fetchr was mainly focused on catering to the last-mile delivery needs of businesses such as e-commerce companies, retailers, and banks (B2C) as well as C2C. The Fetchr app was built on an impressive stack of technologies across the value chain to eliminate hurdles customers faced in the region. One of Fetchr’s important innovations was to use a customer’s GPS a coordinates to identify a location for delivery. Through this patented technology, Fetchr had been able to enhance delivery performance and success rate as well as customer experience. By mid-2016, the company had expanded dramatically, but it had operational efficiency and profitability issues. This was all the more worrying because investors were making it clear to Al Rifai that operational profitability was becoming increasingly important at that level of scale and Fetchr a GPS stands for Global Positioning System, a satellite-based navigation system. Professor V.G. Narayanan and Research Associate Eren Kuzucu (Middle East and North Africa Research Center) prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2019 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by jianxiong huang in BA3103-Fall2019 taught by SUNIL CONTRACTOR, Temple University from Aug 2019 to Feb 2020. For the exclusive use of j. huang, 2019. 119-018 Fetchr: A New Way of Last Mile Delivery should demonstrate that there was light at the end of the tunnel or the success of the company would be at stake. Amidst a discussion on whether to expand into Jordan and Oman, the Fetchr team was scrambling to find ways to cut costs and set about defining ways to improve its operational efficiency: they decided unit economics analysis was to be the way forward. So many questions loomed.