Homegrown taxi aggregators had a bull run last year, with investors pumping close to $300 million into market leaders TaxiForSure and Ola. While TaxiForSure mopped up about $40 million, Ola stole the show with a $210-million investment from Japan’s SoftBank at a valuation of nearly $1 billion. TaxiForSure co-founder Aprameya Radhakrishna, in an interview with Sayan Chakraborty and Anand J, speaks about the company’s expansion plans for 2015, and why it remains undeterred despite Ola’s swelling war chest. Excerpts:
How do you see 2015 unfolding for TaxiForSure?
Today, we are present in 40 cities and aim to get to 100 by the end of the year. Now, we will focus more on getting partners in the auto segment, the nano segment as well as sedans and SUVs. There will be a lot of innovation around finance schemes.
Driving is not a preferred profession. Our aim will be to impress upon people that it can actually help them earn a lot more. It won’t happen on its own. There has to be a catalyst. We, as an aggregator and an active part of the ecosystem, want to play a significant role. It won’t happen overnight, but we will cultivate this ecosystem.
Do you plan to go the Nano way with other car manufacturers?
We are open to tie-ups with the likes of Tata, Toyota and Mahindra, which manufacture popular taxis. Today, to buy a Nano, a downpayment of, say, Rs 75,000 is required. The question is, can we bring that down to Rs 40,000 by contributing a little bit and make it easier for the driver to pay Rs 20,000-25,000?
Since there were no Nanos in the taxi market, we seeded them into the market with drivers. Now, those drivers will start owning the cars from February. They were initially apprehensive about owning Nanos. Now, after seeing the demand, they want to own them.
What will be TaxiForSure’s contribution to EMIs?
The drivers will pay a part of the EMI and, as a seed investment in the Tata Nano category, we will pay half of it. Then, how we structure the deal will depend on the person. We will have tie- ups with financial institutions that will categorise a driver as high- or low-risk and decide on the EMI and downpayments.
Demand for the Nano has been brilliant. It is five times the supply. For other categories, it is three times the supply.
Why are almost all your new features app-based?
Because our margins are so thin. The scale is huge. For instance, if there are 1 lakh autos and each auto does five trips a day, I will have to do 5 lakh calls a day. If even 50% of those bookings come from calls, think of the kind of infrastructure needed. Call centres are for emergency purposes. We will run them 24×7 for customers to reach us in case of an emergency or for registering a complaint.
In the wake of the Uber rape case, what initiatives are you taking to ensure passenger safety? Are these steps pressuring margins?
We can prevent such crimes with various mechanisms, whether it is tracking the car or introducing a panic button. If there are 10 more things we can do for safety, we will do it.
Here, the key question is, can I even predict what my best friend would do? No. But I can always choose my friends. Panic buttons will instill fear among drivers because they are being tracked through GPS. It’s a message to the driver that we are serious about safety.
Having said that, a guy who is up to some mischief will do it. Police verification can throw some light on the past, but how will you ascertain the future? These initiatives add to our cost. Would we have liked to put in more investments for safety? Yes.
As a stakeholder, how do you plan to overcome the regulatory hurdles in the industry’s way?
We are educating everybody and making them understand the aggregator model, and the value we actually bring to the table. West Bengal has supported us. It’s about understanding the industry and coming up with the right laws irrespective of market size. This fundamental has to remain the same. Even Delhi has taken a step forward saying that we don’t have to own cabs, which is great and in the right direction.
It is useless for an aggregator to own cabs since our organisation is not structured to do that. People are understanding that this is the way forward, and guys who own cars are shifting to aggregation. People who don’t shift will not be able to scale up. Acquiring companies is not our cup of tea because we work with operators. Even the whole FMCG market is structured on distributors. For us, value lies in looking after drivers’ interest — a happy driver will have a happy customer.
With SoftBank backing Ola, you will need to up the game.
We have been growing 50% month-on-month for the last three months. We service 40,000 bookings across the country every day. Ola is slightly ahead of us because of the recent funding they got. We have got much less funding.
Three months ago, we were leading. Now they have taken the lead. After two months, we will again lead. They have been raising more money than us in every round, but that has not created any pressure on us. Beating them with less money is something we have gotten used to. We have led the market at various points in time. We aim to take the lead with various supply-side initiatives coming up.