Outstation Taxi market in India is very fragmented and around 99 per cent is still unorganized with many problems in the market. This provides huge scope of innovation to disrupt the market for the benefit of end users. Entrepreneur India interacts with Roder co-founder Ashish Rajput to know more about the startup and what made them venture in this space:
How the idea to start Roder was conceptualized?
During our IIT-Kharagpur days, we faced many problems with taxis, like unprofessional driver, shabby condition of cabs, opaque rates and return fare structure. We witnessed the same situation in Tier-1 cities as well and decided to solve this. Hence, we started conceptualizing the idea in 2013 to provide the most unique service, which also solves the core problem of the industry. We launched our idea in 2014 as a simple cab aggregator facilitating local city and outstation rides, under the brand name ‘InstaCab’.
After 4 months of operations and serving around 1,000 customers, we sat down and analyzed our customer data and saw a lot of churn for outstation one-way booking requests due to return-fare structure. Since the demand was present with huge size of market, we decided to pivot and focus only on outstation market. Our mission is to provide efficient transportation system at affordable prices. With Roder, we plan to revolutionize the outstation travel market and take the overall travel experience into account.
What challenges did you face while setting up initial operations?
When we set out to aggregate cabs for one-way fares, we studied the basic unit economics of a cab and driver. After analyzing their cost structure, we started aggregating cabs especially for one way fares. Since, the concept was new in the market, the initial coordination with the cab drivers was slow. With time, as our volumes increased, our cab partners saw the value in the new one-way fare concept and our fleet size grew organically.
I’ll talk about our pivot from InstaCab to Roder (outstation travels). We decided that we need to stop local city operations and focus entirely on the outstation ones in December 2014. It doesn’t leave good impression to suspend our services and re-launch self with the new product. We had to stop the previous and start the new service simultaneously. In just under 1 week, we built the new fleet, revamped our website and app and launched it again with a bang.
Why did you renamed your brand from InstaCab to Roder?
We started up in August 2014 with the name InstaCab when we were into local city rides. As we evolved into outstation market, we wanted to better communicate our brand and position ourselves as leaders of innovation in outstation industry. Moving forward, we will continue to innovate and provide the best outstation experience to any passenger.
What are the services/offerings available?
We provide cabs for outstation travel either for one-way journeys or car-hires. Our USP is providing one-way fares for one-way journeys, unlike other operators who also charge for the return trip from the customers. We focus heavily on driver verification, which includes mandatory police verification, document verification and execution of an agreement with the cab driver/operator. We do not accept cabs older than 4 years in our fleet and ensure that the condition of the vehicle is good and regular maintenance is carried out to provide the best customer experience in the industry.
Who are your target customers?
While we are a B2C product and accept bookings from customer of all ages and groups, our target customers are working professionals, who travel often between cities and do not want to retain the cab. In that case, our one-way rate offering clicks the right cord with our customers and they are able to save money and also avail the convenience of a cab.
How are you trying to differentiate Roder from your competitors?
In outstation taxi space, all the players and local cab operators provide opaque fares, charge for return fare and somewhat do not focus majorly on driver verification and training. Roder charges only one-way fares for one-way drops and the billing always starts from the pickup address, not from the garage.
What’s the revenue model?
We are a marketplace for cab drivers and operators, and work on pay-per-performance model. We charge a fixed commission on the total fare of the ride.
Is Roder app available across platforms?
Currently, Roder mobile app is only available on the Android platform. We will be launching the app on iOS and Windows platform soon. We take bottom-up approach to ensure seamless customer service. First step is ensuring our partner-drivers are trained properly and they conduct themselves well.
Next is ensuring the technology part of the equation. We have operator base in small Tier-2 cities as well, where network/data connectivity is not good. We have developed in-house technologies to bring these cab operators and drivers online who do not even own a smartphone. While our technology is still evolving and we are innovating to roll out better and easier solutions in the market, we ensure that the current bookings are handled with utmost focus and speed.
What are your future expansion plans?
We recently expanded to 12 cities in Northern India. In the coming quarter, we will go deeper into the market and create a strong base here. Moreover, our technology team operates from Bangalore. So, it will be faster for us to set up operational base over there as well, after 3-4 months. We plan to expand to the entire country in the coming year so that everyone can avail the benefit of one-way fares.
Are you looking forward to raise funds and are you in talks with any investors regarding the same? If yes, where will the funding be utilized?
We have closed our first round of seed investment led by a VC firm. We will be utilizing the proceeds for product development, operational expansion and team building. We are currently in talks with VCs to raise a Series A round for further expansion. We are looking to raise in the range of $5-8 million. We won't be disclosing more details about the Series A round at the moment.