This sharing economy startup is helping increase worker incomes by 400%

Photo credit: andreypopov / 123RF.

On-demand startups such as Uber and Airbnb have been criticized for increasing income inequality, but a fledgling company in Pakistan wants to ease such concerns.

GharPar, which translates loosely as “AtHome”, provides beauty services at your doorstep. It’s a recent startup, mainly operated in stealth mode since September, but it’s starting to make a real impact on the lives of its freelance beauticians.

“The basic inspiration behind the idea was that we realized there’s a lot of exploitation in the salon business,” says Arooj Ismail, co-founder. “The average beautician in these parlors, according to both official statistics and our findings, is only paid roughly US$80 a month. They get a little bit extra as tips but that’s about it.”

Arooj explains that there’s an existing network of freelance beauty professionals in the country – but they’re highly fragmented, don’t offer uniformity of service, and often have poor work ethic. As a result, they’re not able to solicit much business.

Two of GharPar’s freelance beauticians. Photo credit: GharPar.

Another issue is that payment for services rendered is almost always left to the client’s discretion – who may choose to severely undercut them. After all, this is an informal market.

The startup works with the beauticians in its network very closely – service and standards are paramount in an industry like this – to upskill them, provide them feedback on communication skills, as well as presentability.

It sticks to fixed rates that are clearly spelled out before people request a manicure or massage. That was crucial in attracting beauticians to the platform, adds Arooj.

“In the beginning, when we had just started our community mobilization, lots of women we spoke to were highly skeptical of the idea. They were used to being paid low wages. When we told them they could increase income by more than 300 percent, they laughed at us,” she says. “Some thought they might be forced into prostitution.”

Equipped

Arooj – who is one of four co-founders – says it took a lot of convincing and working closely with the communities to get them on board. One of the co-founders also manages a salon, so they tapped into her networks as well. Little by little, people started to warm up to it.

There are now 17 freelance beauticians on board. GharPar takes a 30 percent cut on each transaction to pay for overheads and marketing expenditures. But the women feel safe, secure, and have a lot more disposable income. A 15 to 20 percent cut is typical for on-demand startups. Uber takes 25 percent, not including any booking fees.

The average take home pay has now swelled to US$450 per month. GharPar’s highest-performing beautician raked in US$1,000 in December, according to Arooj. It may be small compared to Western markets, but in Pakistan the minimum wage works out to only US$140 per month. It is also poorly enforced, meaning some workers are paid drastically less.