Meet Uber's Pakistani Rival

As taxi hailing giant Uber enters Pakistan, it has to compete with a little-known local competitor Rixi, which targets low income residents and bets on autorickshaws not cabs.

Reuters said the service hails rickshaws instead of cars. Its platform isn't smartphones, but older SMS phone messaging that allows nearby drivers to bid for any user's business.

The move makes sense as Reuters noted Pakistan has more than 130 million cellphone subscriptions, but only 21 percent subscribe to data packages. The report added that though the numbers are rising, there are opportunities across emerging economies in Asia to tap a relatively low-tech customer base.

The report cited the example of Thailand where Taxi Radio uses calls and text messages to put cabs and people in touch and is popular with those without smartphone apps, and HeyKuya!, an SMS-based service provider in the Philippines, was recently acquired by Indonesia's YesBoss.

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Rixi founder Adnan Khawaja told Reuters his company works with more than 1,000 rickshaw drivers in Lahore. Rixi works by bypassing poor smartphone penetration in the low-income rickshaw market by polling drivers' locations using cellphone towers and matching passengers' messaged locations to points on Google Maps.

"If you look at ... Uber's operational model, they will be depending on the smartphones," said Khawaja. "In countries like Pakistan, India, Bangladesh, that population is [...] growing, but it's still smaller compared to the vast market."

Uber said, "We continue to explore products that would stimulate demand ... and better service the city, whether that is a motorbike, whether that is a rickshaw, whether that is a chopper," said Zohair Yousafi, Uber's head of expansion in Pakistan told Reuters.

So far, Rixi says it has registered about 100,000 rides since it launched in late 2013, and is averaging about 100 rides a day. That's just a fraction of the roughly 200,000 trips that rickshaws in Lahore take every day, according to the Awami Rickshaw Union.