Come 2011 and radio taxis will give a tough ride to the traditional black-and-yellow taxis. According to industry estimates, the number of radio taxis plying on Indian roads will grow by a whopping 400% over next two years, from around 6,000 taxis at present, to over 30,000. Consequently, the revenue will go up by an estimated 700% to Rs 2,000 crore from the current Rs 250 crore, even as all industry players are present in metros and a few tier-I towns.

And it could just be the beginning. Industry players are optimistic that there is a huge potential for growth and even the auto industry may witness a boom over the next five years as over 2,00,000 traditional taxis get replaced from across the country.

No wonder, in less than two years since the concept of radio taxi began in India, there are 15-20 players in the organised taxi business fighting for a bigger pie of the market. Take for instance Meru Cabs. The company, which began its operations two years back, is now successfully running operations in Bombay, Delhi, Bangalore and Hyderabad with a fleet of 2,000 cars.

Likewise, one can spot around 1,500 Easy Cabs running on roads in Delhi, Bangalore, Hyderabad and Chandigarh. ?The company is all set to start operations in Mumbai and this will take up our fleet size from 1,500 right now to 2,600 cars by the end of March. Consequently our revenues will also increase from an estimated Rs 50 crore in 2008-09 to Rs 170 crore in 2009-10. Even the contribution of radio taxis to our total business is likely to go up from 25% at present to 37-38% by the end of the next financial year,? says Rajiv K Vij, managing director, Easy Cabs.

Even Mega Cabs, another big player in the organised taxi segment, is eyeing a little less than 30-fold jump in fleet size from 700 taxis now to 20,000 cars by 2012 across India. The company is currently present in Bombay, Delhi and Chandigarh and will officially flag off its operations in Kolkata in March.

?I am very bullish about the demand for radio taxis. In fact, radio taxis are the future in any evolved economy, more so in larger cities, because we still do not have a reliable transport system in the country. Hence, the numbers would only go up,? says Kunal Lalani, managing director, Mega Cabs.

?Radio taxis have gradually emerged as a preferred choice mainly because of the facility of usage-based payment and better services that these taxis provide,? adds Vij of Easy Cabs.

This boom in radio taxi business is coming at a time when the overall economy has slowed down and people are holding on to their money for the future. ?The slowdown in the Indian economy will only help us more as people with more than one car are cutting down expenditure by either selling off their second cars or restricting its use to cut down their fuel bills and thus opting for cabs,? explains Lalani of Mega Cabs.

In the recent past, airports have emerged as a big opportunity area for radio taxi players as more and more business and leisure travels happen to-and-fro from India. ?As all major states are on the verge of modernising their airports and new airports are fast coming up in different parts of the country there is huge opportunity for all players to widen their business from airport services and this will only mean a more radio taxis vis-?-vis the yellow-black taxis,? says an expert.

This is despite the 15-20% drop in business from airport services over the last few months when the air traffic fell sharply, first in the months of August, September and October because of high fuel prices and then in November and December following the terrorist attacks in Mumbai.

However, there is lot to happen before the industry meets the estimated targets. For instance, high interest rates, lower availability of trained drivers, absence of proper licensing arrangements for the drivers and the lack of entrepreneurial spirit in drivers in India, unlike their counterparts in Singapore, London, Paris, Toronto and New York, could play a spoil sport.

?Since the car prices are still high and interest rates are far from softening down, over and above the not so easy availability of finance, there is a fear that the cab operators might hold back their fleet expansion plans. This, in turn, will slow down the growth of the overall industry,? says Mark Periera, chief executive officer, Meru Cabs, adding that the industry will surely take a hit if the economic activities do not pick up in the next three-six months.

?There needs to be a more structured programme for drivers? licence by the transport department and the same should not be provided by the company as is done now. Moreover, the government should allow the drivers to eventually own the radio taxi as in that case there would be an in-build interest to serve the customers well and maintain the vehicle that the own,? says Vij, adding that the provision of proper space for pick ups should be done in all localities for customers? convenience.

?Even the lack of trained drivers could be a hindrance in the growth of the industry. In fact, so much is the challenge that companies like V-Link Taxis, which is the parent company operating Meru, had introduced a drivers? training programme some time back to ensure that they have best drivers,? adds an industry expert.