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Taxi aggregators

How Inter-City Cab Aggregation Is Coming Of Age In India

How Inter-City Cab Aggregation Is Coming Of Age In India
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

It most certainly is a new era for the cab aggregation industry in India, which has never before been in a better state. I believe this is part of a larger trend wherein a lot of new businesses are coming up with the fundamental thought of doing aggregation be it in financial services, food tech, cabs, travel etc.

A huge amount of venture money has been flowing into cab aggregation though mostly in companies that deal with intra-city travel; the inter-city taxi booking market at its end is still largely driven by offline tourist taxis and round-trip vendors.

That said, road travel comprises 85 per cent of travel as compared to train at 15 per cent and taxis registered with All India Permit amount to 5 lakh + across India. Analysts have pegged this market at an estimated $7-10 Billion, of which 90 per cent is unorganized. While challenges are many, based on our experience over the last two years in this space, we believe the future points to the following trends:

Value adding aggregators

Last couple of years, startups have been born and built on the aggregator mantra. Manufacturing or retailing per se is a thing of the past, and the future points to aggregation. Be it in retail, hospitality, outstation taxis and many other sectors, the impact of aggregator-based models is being felt both by customers and suppliers.

The flip side is that in the long term, the value of any aggregator is tending towards zero unless they do a specific value add for the end consumer. Pure play directory or listing or information services will soon die a natural death.

Google realized this as soon as they started dominating the search aggregation business, and rapidly value-added new products on top of its search engine including maps, mail, video etc. Startups in this space realize that they will have to add additional value and transform themselves in order to gain more significance in terms of valuations.

On-demand is the next big thing

We grew up in an era where we used to stand in queue for 4 hours to book a train ticket 3 months before the journey date, and it was celebration time if we got a confirmed ticket. Today, we are a part of young and growing on-demand economy.

Customers are no longer inclined to plan or pay in advance, and this is a unique challenge to every business. In our business of inter-city travel, we have already noticed 80 per cent of bookings are for today or tomorrow, and only about 10 to 20 per cent of bookings are played safe and done in advance.As a result, on-demand aggregators who crack the following challenges will succeed.

How do you tailor a process, which serves customers on a short notice? How do you ensure to ramp up your supply within few seconds? How do you make sure your team responds to customer queries with lightning fast speed, time after time? These are challenges faced by startup CEOs every day. We may love them or hate them, but that is the consumer behavior nowadays.

If that’s not enough, in our space as in other sectors such as hotels, retail, taxis or telecom, both affordability and availability are equally important if you want to create brand value—it can’t be an either-or situation. If it’s too expensive then it’s not attractive to customers. On the other hand, a great deal, if not consistently available, results in customers losing interest.

Localize, localize, localize

Few years’ back, all foreign goods or services without exception were considered as superior in India. But with mobile and internet penetration, localizing and personalizing products as per customer requirements has become a competitive advantage.

So you can't just blindly ape something anymore from America and sell it in India. Even within India, we have to always be on our toes as we expand to new regions.

As an inter-city cab aggregator that has cracked the code for North India and are now getting our footprint in the South starting with Bangalore and Hyderabad with a plan to expand to East and North East, we are learning very quickly that the challenges, scenarios, and opportunities in each region are unique.

I can see the day in the not too distant future where people take on-demand taxis from Delhi-Mangalore or Mangalore-Guwahati or Guwahati-Goa, and otherwise un-ventured routes by these means, if of course cost, comfort, and convenience are adequately addressed.

Challenges notwithstanding, inter-city cab aggregation market is going to play out bullishly, to say the least, and on-demand taxis for outstation routes will be as common as going by bus or train. Of course, it may take five to ten years to fulfill this vision!