After Mega Cabs logs Rs 2 cr loss, chairman Kunal Lalani says targetting Rs 100 cr in revenues

By: | Published: August 31, 2017 4:48 AM

Taxi service provider Mega Cabs posted losses of close to Rs 2 crore on revenues of Rs 75 crore for the year ended March 2017, Kunal Lalani, chairman, Mega Cabs told FE.

Mega Cabs, Kunal Lalani, Taxi Service providerTaxi service provider Mega Cabs posted losses of close to Rs 2 crore on revenues of Rs 75 crore for the year ended March 2017, Kunal Lalani, chairman, Mega Cabs told FE.(Image: IE)

Taxi service provider Mega Cabs posted losses of close to Rs 2 crore on revenues of Rs 75 crore for the year ended March 2017, Kunal Lalani, chairman, Mega Cabs told FE. The company is targeting a revenue of Rs 100 crore in FY18, said Lalani, adding, “the aim is to bring down the losses further next fiscal. However, the reduction in losses depends on a lot of factors, including our expansion plans.”  According to data platform Tofler, Mega Cabs reported a loss of  Rs 5.8 crore on revenues of  Rs 39 crore in FY15. The company is yet to file its FY16 and FY17 earnings with the Registrar of Companies (RoC).

The taxi service which competes with the likes of Uber, Ola, Meru Cabs among others, currently operates in six cities, including Delhi and Bengaluru, with a fleet size of about 2,500 cars. As per Lalani, the company plans to expand its fleet size to 8,000 vehicles in 20 cities by 2020. As for the business model, unlike Ola or Uber which operates as online cab aggregrators, Mega Cabs has leased out 65% of its cars to drivers, with the company deducting a flat amount of Rs 1,100 for a fixed period of four years, while the rest of the vehicles are owned by drivers. The company claims that on an average its drivers earn anywhere in the range of Rs 2,500- Rs 3,500 a day.

“Currently we follow a hybrid model which is a combination of aggregrator and owning 65% of the fleet which has been leased out to drivers. But within a year we will bring down the ratio at 50% each,” added Lalani.  In case of cars which are owned and operated by drivers, the company earns a commission of 15%-18%.  Also, it plans to continue to run its services at airports and railway stations, as it allows drivers to earn better fares. As per Lalani, the averages ticket size ranges between Rs 500-800. “For example the average ticket size in Bengaluru is around Rs 800, while drivers earn about Rs 600 on an average in Delhi and Rs 500 in Kolkata,” he explained.

As competition stiffens, Mega Cabs plans to run a variety of cab services including hatchbacks under Mega Lite, Mega Sedan, Mega SUV and Mega VIP. “We recently rolled out Mega Lite in two cities Pune and Kolkata, where it is being tested. The fare has been fixed at `16 per km. If the service picks up in these two cities, it will be rolled out in other markets, soon,” said Lalani.

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