As this business gains momentum, there are several challenges that have emerged. After our earlier opportunity article on this business, this is a follow-up piece to find out how the business is shaping up
This sequel is long due. We had done an opportunity article on radio cabs called Drive into Rs 7,000 Crore in October 2007.
It has been nine issues since, and there is still an incessant splurge of queries regarding this business. These queries are flying in from all directions; contemplating entrepreneurs, industry researchers and analysts, existing transport players, customers, etc.
So, here is what DARE did. We consolidated all the generated responses; spoke to various radio cab companies, their chauffeurs, and regular customers. Thereafter, we looked at how the business is shaping up and how the companies are dealing with issues and challenges faced in this growing phase of business.Let us begin with growth and expansion that has happened since October 2007.
Business expansion
The increase in the number of radio cabs on the roads is a fact that is hard to miss by anyone. The companies operating the radio cab services had planned for increase in the fleet size when we last spoke to them, and it has happened to quite an extent (See Table).
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Easycabs, for instance, saw a substantial percentage increase, in both, fleet size and geographical expansion. Back then it was operating in Delhi and Chandigarh, and now it has expanded its operations to Bangalore, Hyderabad, and Mumbai. When it comes to the number of customers serviced too, there has been a significant rise. Easycabs used to cater to 2,000-odd customers per day, and now has 5,000 customers in Delhi alone. Additionally, it has about 2,000 customers using their cabs in Hyderabad and Bangalore put together.
Similar growth has happened with Meru, the fleet of V-Link Taxis. Meru had launched its services in Mumbai in April 2007 with a fleet of 50 cabs. Since then, it has upped its fleet size and geographical presence very quickly and significantly at that. Even Delhi Cabs, which is the fleet run by Orix Auto Infrastructure Services (OAIS) India, has a beefed up presence now in Delhi, and has got the license to operate in other cities. In the number game (cabs in fleet), almost all the players have expanded services to a large extent in the past one year.
Revathi Roy of Forsche, the cab service exclusive for women, has had its share of expansion too. But this is not purely on the lines of increase in the fleet size. She has been facing a lot of challenges in scaling up, but that has not deterred her from expanding in her line of business. In a strategic alliance with Orix, she phased out their old cars, and got new ones. Also soon enough, OAIS fleet will have a special segment within the fleet which will continue the women-only service, under the name Delhi Cab Forshe, Hyderabad Cab Forshe, and so on.
| DARE/Fleet size | |||||||
| Number of cabs in fleet | |||||||
| Radio cab | Delhi | Mumbai | Bangalore | Hyderabad | Kolkata | Chandigarh | Goa |
| Delhi Cab | 500 | (CS) | (CS) | 100 (CS) | 200 (CS) | – | – |
| Easycabs | 550 | (CS) | 400 | 350 | – | 50 | – |
| Forsche | (CS) | 20 | (CS) | (CS) | – | – | (CS) |
| Megacab | 300* | (CS) | – | – | – | – | – |
| Meru | 200 | 500 | 500 | – | – | – | – |
Apart from this, she has begun training academies in the cities of Mumbai, Delhi, and Hyderabad, under the umbrella of the newly formed venture between Forsche and OAIS, called Forshe Travels & Logistics. The academy is purely for the induction and training of women chauffeurs for the fleet of Forshe. The first batch of 56 women chauffeurs is already out.
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| Our fleet size has increased from 350 to around 1,400 cabs and we are now operational in Hyderabad and Bangalore, besides Delhi. Easycabs catered to 2,000-odd customers per day back then, and now has 7,000 customers. Rajiv K Vij | (about the launch of the Meru Training Academy) It is imperative that all commercial drivers receive the necessary training in road safety and customer service. This will help provide passengers with the best possible quality of transportation as well as minimize the number of accidents on roads. Neeraj Gupta |
Opening training academies is another initiative that some companies have taken. V-Link Taxis, which is the parent company operating Meru, had introduced a drivers’ training program in November 2007 in association with the Road Transport Office (RTO). Emphasizing more on the scope of such training academies, Neeraj Gupta, Managing Director of V-Link Taxis had stated in a press release, "With the increase in privatized transport services, it is imperative that all commercial drivers receive the necessary training in road safety and customer service in order to provide passengers with the best possible quality of transportation, as well as to minimize the number of accidents on roads. In addition to this, knowledge of the city, key areas and buildings is also vital to a commercial driver to perform effectively." Typically the chauffeurs undergo a week-long training of six to eight hours per day, and have to pay up a fee that is in the range of Rs 4,000 to 6,000. The challenge here is to get enrolled in the program, as it actually means compromising on six business days, while having to shell out the fee.
Advertising scenario
Radio cabs as a medium for advertising always had the potential. In terms of advertising space, the advertiser has options to display his ads on the doors of the cab, on the translate, which is on top of the car, the headrests inside the cab, on the seat covers, etc. Of course, the companies operating radio cabs have to seek NOC from the regional traffic police office and permissions from the state transport authorities.
Typically, advertising on radio cabs is a package deal that consists of display on a certain number of cabs for six months, on one or all of the mentioned ad spaces. If one were to put an average to the charges, it would come to somewhere around Rs 7,000 to 10,000 per cab per month. As for value proposition, Meru collates the daily run (number of trips and kilometers), and provides its clients with monthly reports that speaks of the number of impressions each cab carrying the advertisement is providing. As mentioned in one of the reports on agencyfaqs, Neeraj Gupta of V-Link Taxis explains how the impression data is worked out, "For the cabs in Mumbai, there are around 500 impressions per kilometer. That comes to one lakh impressions per day per cab and approximately 90 lakh impressions per quarter."
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written by aditya mistry, December 21, 2010
written by Sunny, May 18, 2010
written by ravi prakash, December 28, 2009
some kind of survey they had provided who needs a survey to start a enterprise
if they want to be helpful they should give info about
how to get the equipments?
how to mange manpower?
what are the legal papers required?
that would be information required by the people who are realy intrested in geting into these buissness
written by johndavid, November 27, 2009
written by anil, February 19, 2009
written by arun, November 05, 2008
written by Parthiban Rajendran, August 11, 2008
I atlast found one "arya omnitalk" solutions only to see that they provide only in main cities and not in small cities like mine. Then how do call taxis in other cities work? To my surprise, the representative in "arya omnitalk" too got surprised and was claiming there are only 2 licensed such solution providers in India! The other one is a small guy somewhere out, and they are almost the monopoly.
My question was then, how in my city, call taxi have walkie talkies? Who is the service provider here? To whom should I contact for such equipments and licenses if any? After trying internet for hours, I am thinking of going back to good old days of dropping in a call taxi, and inquire the driver!! Well, is the world not yet flat in India? (Read "The world is flat again")
I would have been happy, if this article addresed such issues of some dealers from whom such equipments can be bought, legal hassles involved, etc. I hope they would. I am expecting another sequel for this subject addressing such issues.
written by Rajat Chaddha , July 27, 2008
Another factor which supports the increasing use of cab's is the increasing traffic on Indian roads and increasing disposable income among the working class wherein they would not hesitate to shell out little extra for a cab rather than taking their own car in the heavy traffic in case of a special ocassion
Still this business need's to cover a long way to be on the same lines as in other countries like US, Simgapore and other European Countries.
Also this is a great que for automobile companies to closely follow the growth of such cab companies and plan their strategy well in advance to ensure their maximum presence in the millions of cab's expected to be plying on Indian roads in the coming year's
Please feel free to send your view on my Email id : rajatchaddha07@gmail.com
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So please let me know the process to be part of this organization as I am interested to launch my cab within your system.
Be in touch with me @ below mentioned contact no.
Regards:
Anil Mehra