Business Today

Start-ups aim to make your ride smoother

Start-ups offering new-age cab rental services are making drives smoother and merrier.

twitter-logo Taslima Khan        Last Updated: April 16, 2012  | 16:39 IST

If you have been left fretting after your call to a customer care number was put on hold for 15 minutes when you tried booking a cab, there is hope for things to get better. A row of start-ups have lined up to provide the next generation of cab booking services, making sure they give you the best customer experience - one that is not only driven by chauffeurs but also by technology.

Start-ups like Olacabs are on a fund-raising spree.  While Olacabs raised funding from Tiger Global Management, a New York-based investment firm, its peers are not behind. TaxiGuide, another car rental start-up raised Rs 25 lakh in angel funding from Anand RP, Investment Director at Squadron Capital.  Also, Bangalore-based ventures, YourCabs Auto Services and Savaari Car Rentals, have raised funding from Sprism Investment Private Limited and Inventus Capital Partners respectively.

"We are more of a technology company than a taxi company," says Mumbai based Bhawish Aggarwal, a pass out of IIT Bombay who founded his car rental service, Olacabs, in January 2011. The start-up promises to get you a cab at your doorstep within 10 minutes of booking.

Just like mom and pop or kirana stores, 90 per cent of the car rental space is unorganized with small players operating locally. Industry estimates peg the market for car rentals at Rs 12,000 crore to Rs 15,000 crore. The business is highly capital intensive as operators spend heavily on buying the cars, hiring drivers and on maintenance. On the customer side, the pain shows up in getting cabs booked over phone, the driver calling you up for directions or cars arriving late because of traffic. Thankfully, newer entrants are working up their brains to do things differently.

For instance, Olacabs allows you to book your cab through a mobile application downloaded on your mobile. You book cabs with a couple of clicks on your phone or online and you receive no calls unless the cab arrives at your place. "With the mobile app, you can even track the car while it is on the way," says an excited Aggarwal, whose fleet has expanded from a couple of them to 700 now. A Global Positioning System, or GPS, enabled device installed inside the cabs enables the driver to locate the destination easily. Olacabs plans to enter Delhi and other cities by the end of April this year.

Another company on the drive is Bangalore headquartered Savaari Car Rentals which is present in 60 cities and its fleet of cars have travelled over 75 lakh kilometers. The start-up which offers online bookings for day bookings, multiple day bookings or multi-city bookings has grown to a network of 100 operators.  

The biggest pain is for inter-city travelers who are not sure of getting a reliable service when they arrive in an alien city. "Even small services inside the cab like a bottle of water, newspapers or the courtesy of the driver make a big difference," says Samir Kumar, Managing Director at venture capital firm Inventus Capital Partners, who invested one million dollars in Savaari recently.

What is great about the business model of these new age cabbies is that the likes of Olacabs and Savaari Car Rentals do not own the cars which helps reduce the capital expenditure drastically. They are aggregating existing operators and training them according to their needs.  "This leaves them with more room for investing in technology to improve customer experience," says Kumar.  

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