Two new startups want to disrupt the informal labor market in Pakistan

The labor market in Pakistan is dangerously unregulated, unstructured, and operates mainly on an informal basis. While the largest chunk is employed by the agriculture sector, there is also a significant informal market catering to the retail, construction, and household services industries. Affluent Pakistani families employ cooks, drivers, nannies, and gardeners to serve them. Most employment is arranged through personal references, and salaries are paid in cash.

This phenomenon also extends to other aspects of the service industry. Temporary labor hires such as plumbers, carpenters, electricians, and masons often crowd specific markets looking for work. Prospective employers know that a trip to the local market is needed if they wish to hire someone for temporary repairs. The concept of employment agencies or online portals to survey available options is almost non-existent.

The unregulated and informal nature of this industry means it is inefficient and ripe for disruption. Blue collar workers are not certified by any vocational training institutes because few exist in the country. Most training is done on-the-job, and incidents where a problem was exacerbated by a supposed technician are not uncommon. Employers are fearful of trusting someone to tackle an issue such as a faulty air conditioner, as they are not certain whether the mechanic has the necessary skills to do so. Furthermore, skilled workers are also prone to maltreatment and abuse; as they work in an informal setting, they do not have access to legal recourse if an employer refuses to pay. There is also an information gap; workers have to wait for opportunities to come to them and cannot solicit projects on their own.

The Sukoon team

Vast opportunities to scale

Despite these structural gaps, the size and potential of the informal labor market is massive. This is why two new startups are fervently trying to get a piece of it.

The first startup, Sukoon, is led by aspiring entrepreneurs Shoaib Iqbal and Qazi Umair. Both are business graduates from a local university, and despite currently working at a Rocket Internet startup, they claim that entrepreneurship is in their blood. “I come from a family that has had a long tradition of doing civic-minded businesses,” says Iqbal. “My passion in life has been to help myself as well as those that are less fortunate than me.”

Incidentally, Sukoon is also the first startup to officially launch operations after incubation at Google-funded The Nest I/O. How it works is fairly straightforward. First you log on to a portal where they can view available electricians, plumbers, carpenters, and masons. After clicking on the type of technician required, the site redirects you to a page where you can describe the problem in detail, upload an image, and give your residential address. A member of the Sukoon team will then contact you to verify and confirm your problem, and dispatch the necessary handyman.

To guarantee authenticity of all workers on its portal, Sukoon undertakes painstaking checks before signing them up. An induction process ensures that applicants are cleared by the police and are proficient at their tasks. Furthermore, a community review system means that each worker is rated at the end of his or her job. If there are any complaints, he or she can be put on instant probation, with expulsion from the portal if the same complaint is received from another client.

Existing workers on the Sukoon platform seem to be satisfied with the opportunities that the startup has offered them. Faisal, an electrician employed at Sukoon, says he is now regarded as a corporate employee, giving him a degree of legitimacy and respect. Furthermore, the information gap is shrinking, and he has appointments booked days in advance, increasing income and job security.

Currently Sukoon is based in the coastal metropolis of Karachi, but has ambitious plans of expanding to other cities. “Our dream is to help support underprivileged workers and make their lives better,” adds Umair.

Adding to competition