Road runners

While Ola and Uber have made inroads into country's transport-sharing market and now are burning billions in the race to amass a bigger chunk of it, a number of start-ups are steering clear of the space dominated by the Unicorns. Instead, they are looking to address mobility issues in unqiue ways establish their foothold in those segments.

Industry estimates peg the organised cab-hailing sector in India to be upwards of $10 billion, with Ola and Uber jointly commanding almost 85-90% of the share. Although the market is lucrative, the dominance by the two Unicorns is compelling entrepreneurs to leverage technology and explore niche avenues such as outstation and inter-city focused journeys, bike-hailing, self-drive options, bicycle sharing and luxury rentals.

“With changing transportation dynamics, a declining trend in car ownership is being noticed, which corresponds to an increase in customers seeking options that afford greater convenience. Thus, cabs are becoming the preferred choice of travel for riders. However, the intra-city segment is very competitive due to the presence of large technology-enabled players in the local ride-hailing market. In contrast, the outstation market, while competitive, is still largely unorganised due to most of the businesses having traditionally been driven by regional travel operators,” says Deepesh Arora, co-founder and CEO, Gozo Cabs, a technology-driven provider of taxis for outstation travel. 

Arora says Gozo's technology is tailor-made for outstation and inter-city travel. “The platform utilises technology to maximise the matching of one-way rides to create round trips for taxi operators, thereby creating a win-win for the ecosystem. Most customers save 10-50% by taking one-way outstation trips with Gozo, over having to pay for a round-trip,” adds Arora.

Eco Rent A Car, which is into luxury rentals, is expanding its self-drive vertical by developing a franchise business, says joint managing director Aditya Loomba. Self-driving is picking up tremendously with millennials who look for weekend getaways in the comfort of a car that they can drive at their own pace and convenience, say entrepreneurs. 

According to Greg Moran, co-founder and CEO of self-driving platform ZoomCar, as the taxi-hailing market matures, nuances of customer experience like privacy, flexibility, multiple stops, etc, come into prominence. “This is where self-drive cars fit in naturally.” Last year, Zoomcar raised $40 million in a series-C round led by Mahindra & Mahindra and others. 

Meanwhile, entrepreneurs like Aravind Sanka of Rapido are trying to gain a hold in the “bike-taxi” segment that allows customers to ride pillion in a safe manner and reach faster at a lower cost of around Rs 3-5 per kilometre. Cabs cost upwards of Rs 8-10 per km. 

It is not logical to have a business model that mirrors either Ola or Uber. The market holds significant potential when looked at only with niche services and offerings, say entrepreneurs who believe that strategising unique game-plans helps in customer acquisition and investor attention. 

According to Sanka, Rapido, which recently raised $10 million from Hong Kong-based investment firm Integrated Capital, is growing at 10 times year on year. “We expect the momentum to continue,” said Sanka, adding that Rapido grew from 0.3 million rides per month in January 2018 to 2.5 million rides per month in January 2019. “We plan to reach 50 cities in India by this year end. And we are working on providing users with a way to book rides without the internet.”

Gozo Cabs expects to achieve Rs 100 crore in revenue this year, says Arora. “We currently have over 25,000 cabs on our platform and have over 30% of the business coming in from repeat customers,” adds Arora. 

Meanwhile, Eco Rent A Car has been witnessing a growth of 30% for the last five years, says Loomba. “We should close this year with a turnover of Rs 350 crore.”

ZoomCar plans to treble its fleet to 20,000 cars by year-end, from about 6,500 at present. The venture is optimistic about overseas expansion as well. According to Moran, markets in Southeast Asia and Africa have traits similar to India. “The business model in these new markets may be different and that could be through partnerships, licensing, or franchising. The first move in a foreign market may be made in the near future.”

A DIFFERENT PATH

• Over $10 bn – Organised cab-hailing sector in India, as per industry estimates
   
• 85-90% – Combined share of Ola and Uber