The Trouble With Taking an (online) Cab
Came across this very factual article about state of Radio Cab Services in India. The original article can be found here.
Rashi had to discontinue driving after she entered her sixth month of pregnancy. Every evening, she would call a few taxi services (Meru, City Taxi, Spot Taxi etc) but none of them would have a cab available for her from Manyata Tech Park, Bangalore, to her home 9 kms away, even when she would call three hours in advance.
Olacabs came to the rescue with the phone app that would locate the closest unoccupied cab and its driver’s details would be smsed to her, and he would call her back to confirm the exact address. Things became easier, instead of calling multiple cab services, all she has to now do was just launch an app and tap a button. It was good but for an occasional driver driving rash despite frequent requests otherwise.
This daily routine went on fine for some time till one morning when she requested a cab, the nearest one was 10 kms away. The driver called and fixed a pick up time half an hour later, which was acceptable. What was not is, the taxi arrived an hour and half later, and even after frantically calling the driver and the provider’s office, they would not arrange an alternate cab!
Another day, she placed a request to “Pick me up” from the Olacabs Android app, and received an sms instantly. When the driver didn’t call back for 10 minutes, she called him, and was told that his shift was over! She cancelled the request and placed another, to be allocated the same out-of-shift driver. She had to then call the office and book another cab, but not before painstakingly explaining to them why had she to cancel her previous bookings. And there were follow up calls about the cancellation, asking the same questions over and over again.
The above incident repeated another day same week. Only this time she was experienced to handle it better, and called another cab service after the first response, rather the lack of one.
Tajender had an early morning flight to board from IGI Airport, Delhi. His cab arrived at the designated time of 4am at his Gurgaon residence. As he entered the car, the first thing the cabbie enquired was about a nearby petrol bunk. Turns out the very little fuel he had would take him 5, maybe 10 kms, and there was no petrol pump open at that wee hour. He had to call and request for an alternate cab, which obviously took time, and he almost missed his flight.
Sameer was coming back from Gokarna to Bangalore on a day when the BMTC went on strike, and contemplating taking a cab, called for a taxi 15-20 minutes before the bus would reach. Both Olacabs and TaxiForSure said they could provide one only in an hour. He was in a fix, and at the mercy of autos. Also, for instances like these, the app wouldn’t work from a remote location.
The taxi journey in India has travelled quite a bit in the past few years. From prepaid taxis at airports/railway stations to the neighbourhood travel agent doubling up as a taxi provider, from call taxis to radio cabs to cab-aggregators, you have a plethora of options today. The booking process has evolved with technology: from visiting an agent to book a cab to phone booking, online booking to booking via a location-aware mobile app.
Most providers today use GPS-based or triangulation-based tracking of their fleet, and employ sophisticated algorithms to find out the nearest and fastest available cab to a customer. There are different models of operation of these cabs, some operators buy their own fleet and employ drivers, some aggregate smaller operators or individual cabbies. OTAs like Cleartrip have also come up with their own cabs to fill up the last-mile connectivity. There are also cabs targeting specific customers, for example the lesser-known ladies-driving-ladies ForShe, that had to be stalled for lack of funds, later giving way to Viira Cabs.
The space seems overcrowded but we still have new entrants coming up, and most of them have been able to raise angel and seed funds, be it Olacabs, BookMyCab, TaxiForSure, or Savaari. Apart from these funding news, we have been featuring cab services like GetMeCab, TaxiGuide, Savaari, YourCabs, EzyTaxi. There are dozens other *.Cabs like Mega Cabs, Easy Cabs, Go Cabs, Spot Taxi, City Taxi, that ply on city roads promising to fulfil their purpose of transporting people from point A to B.
Are they doing it right? Non-availability of cabs, unprecedented delays, inept communications between the provider and the driver, language barriers, hassles over return change, clumsy cabbies unable to understand directions or locate addresses, rude behaviour, rash driving, are a few problems that a frequent taxi-rider has to go through. She is commuting to her destination, but not with a very good experience. At least not all the time. Not consistently.
To start with, taxis were an unorganized sector, and there have been quite a few attempts to organize it, not many of whom have been able to sustain it for long. Most services begin with a huge promise, work well for a few months, and then start showing signs of growth pains. Providers would have had soft-skills trainings for the drivers, most of whom would actually get trained, but only a few of them would keep putting that to practice over a long period of time. Aggregators would check each and every car in the morning, but would still receive complaints from customers about mosquitoes, or wet upholstery. Companies would start the business on a fixed per day payment from the driver, and the driver in this case would try to get as many trips as possible. Taxis would be fitted with geotagging instruments, but these would not turn off after the shift automatically, or the driver would forget to do so manually.
With all these cab services operating in most of the bigger cities like Delhi, Mumbai, and Bangalore, the taxi-booking problem is not solved. There may be many other options now and many other ways to book a cab, but the supply doesn’t match the demand yet. Even after a crowd has emerged in the form of taxi providers, the bigger crowd of taxi users has grown bigger, and faster.
Most of these operators begin in one city, and then look forward to expand in multiple cities as soon as they get funded. Funding adds pressure on the companies to grow faster rather than ensuring sustainable models. The aim should instead be to focus on the first city, establish themselves and please customers there before moving on and expanding the model. It is probably a business that should take more time and grow slower. Aggregators like Spot Taxi, Cool Cabs have come and nearly gone with the same trouble–eventual degradation of services.
The aggregator business also depends on how much is it a value addition for the operator/driver. Meru, for example, hires drivers based on their experience, and the driver has to pay a fixed amount back to Meru everyday for using the franchise name. Though this ensures an easy means for the driver to get regular business, depending on how he perceives the cost associated with it, he may or may not stick around. The aggregators also face the problems of taxi operators asking customers to call them directly in a bid to bypass the middleman. The stickiness is often one-way, since the aggregator totally depends on the services of the operators.
The cab business also varies from city to city. Mumbai, for example, still has its own fleet of yellow-black Premier Padmini and Ambassador cars that are easy to get and cheaper. While these may be a competition to the newer entrants, Meru has a different aspect to turn this in its own advantage. The number of overall taxi licenses in Mumbai are constant, so if a yellow and black decides to sell its license, Meru buys it and replaces the yellow and black with a Meru. This is something the newer guys will take time to do.
The biggest concern now is that the quality of the experience is not consistent with time, which is one important factor in user-satisfaction. Teething problems are acceptable, but a degradation in performance over time would shoo away customers. If you look at the aforementioned problems, not all providers have all of them. Most of them have just one or two black sheep that is creating a bad experience. Punctuality is a must, soft skills of the driver is another, basically building a trust factor. The other features are good-to-have, and though they can improve the short intra-city travel, may not be the deciding trigger. There is quite some hope in this market, and there is scope for more than one player, and yes, competition is always good for the consumer.
Rashi had to discontinue driving after she entered her sixth month of pregnancy. Every evening, she would call a few taxi services (Meru, City Taxi, Spot Taxi etc) but none of them would have a cab available for her from Manyata Tech Park, Bangalore, to her home 9 kms away, even when she would call three hours in advance.
Olacabs came to the rescue with the phone app that would locate the closest unoccupied cab and its driver’s details would be smsed to her, and he would call her back to confirm the exact address. Things became easier, instead of calling multiple cab services, all she has to now do was just launch an app and tap a button. It was good but for an occasional driver driving rash despite frequent requests otherwise.
This daily routine went on fine for some time till one morning when she requested a cab, the nearest one was 10 kms away. The driver called and fixed a pick up time half an hour later, which was acceptable. What was not is, the taxi arrived an hour and half later, and even after frantically calling the driver and the provider’s office, they would not arrange an alternate cab!
The above incident repeated another day same week. Only this time she was experienced to handle it better, and called another cab service after the first response, rather the lack of one.
Tajender had an early morning flight to board from IGI Airport, Delhi. His cab arrived at the designated time of 4am at his Gurgaon residence. As he entered the car, the first thing the cabbie enquired was about a nearby petrol bunk. Turns out the very little fuel he had would take him 5, maybe 10 kms, and there was no petrol pump open at that wee hour. He had to call and request for an alternate cab, which obviously took time, and he almost missed his flight.
Sameer was coming back from Gokarna to Bangalore on a day when the BMTC went on strike, and contemplating taking a cab, called for a taxi 15-20 minutes before the bus would reach. Both Olacabs and TaxiForSure said they could provide one only in an hour. He was in a fix, and at the mercy of autos. Also, for instances like these, the app wouldn’t work from a remote location.
The taxi journey in India has travelled quite a bit in the past few years. From prepaid taxis at airports/railway stations to the neighbourhood travel agent doubling up as a taxi provider, from call taxis to radio cabs to cab-aggregators, you have a plethora of options today. The booking process has evolved with technology: from visiting an agent to book a cab to phone booking, online booking to booking via a location-aware mobile app.
Most providers today use GPS-based or triangulation-based tracking of their fleet, and employ sophisticated algorithms to find out the nearest and fastest available cab to a customer. There are different models of operation of these cabs, some operators buy their own fleet and employ drivers, some aggregate smaller operators or individual cabbies. OTAs like Cleartrip have also come up with their own cabs to fill up the last-mile connectivity. There are also cabs targeting specific customers, for example the lesser-known ladies-driving-ladies ForShe, that had to be stalled for lack of funds, later giving way to Viira Cabs.
Are they doing it right? Non-availability of cabs, unprecedented delays, inept communications between the provider and the driver, language barriers, hassles over return change, clumsy cabbies unable to understand directions or locate addresses, rude behaviour, rash driving, are a few problems that a frequent taxi-rider has to go through. She is commuting to her destination, but not with a very good experience. At least not all the time. Not consistently.
To start with, taxis were an unorganized sector, and there have been quite a few attempts to organize it, not many of whom have been able to sustain it for long. Most services begin with a huge promise, work well for a few months, and then start showing signs of growth pains. Providers would have had soft-skills trainings for the drivers, most of whom would actually get trained, but only a few of them would keep putting that to practice over a long period of time. Aggregators would check each and every car in the morning, but would still receive complaints from customers about mosquitoes, or wet upholstery. Companies would start the business on a fixed per day payment from the driver, and the driver in this case would try to get as many trips as possible. Taxis would be fitted with geotagging instruments, but these would not turn off after the shift automatically, or the driver would forget to do so manually.
With all these cab services operating in most of the bigger cities like Delhi, Mumbai, and Bangalore, the taxi-booking problem is not solved. There may be many other options now and many other ways to book a cab, but the supply doesn’t match the demand yet. Even after a crowd has emerged in the form of taxi providers, the bigger crowd of taxi users has grown bigger, and faster.
Most of these operators begin in one city, and then look forward to expand in multiple cities as soon as they get funded. Funding adds pressure on the companies to grow faster rather than ensuring sustainable models. The aim should instead be to focus on the first city, establish themselves and please customers there before moving on and expanding the model. It is probably a business that should take more time and grow slower. Aggregators like Spot Taxi, Cool Cabs have come and nearly gone with the same trouble–eventual degradation of services.
The aggregator business also depends on how much is it a value addition for the operator/driver. Meru, for example, hires drivers based on their experience, and the driver has to pay a fixed amount back to Meru everyday for using the franchise name. Though this ensures an easy means for the driver to get regular business, depending on how he perceives the cost associated with it, he may or may not stick around. The aggregators also face the problems of taxi operators asking customers to call them directly in a bid to bypass the middleman. The stickiness is often one-way, since the aggregator totally depends on the services of the operators.
The cab business also varies from city to city. Mumbai, for example, still has its own fleet of yellow-black Premier Padmini and Ambassador cars that are easy to get and cheaper. While these may be a competition to the newer entrants, Meru has a different aspect to turn this in its own advantage. The number of overall taxi licenses in Mumbai are constant, so if a yellow and black decides to sell its license, Meru buys it and replaces the yellow and black with a Meru. This is something the newer guys will take time to do.
The biggest concern now is that the quality of the experience is not consistent with time, which is one important factor in user-satisfaction. Teething problems are acceptable, but a degradation in performance over time would shoo away customers. If you look at the aforementioned problems, not all providers have all of them. Most of them have just one or two black sheep that is creating a bad experience. Punctuality is a must, soft skills of the driver is another, basically building a trust factor. The other features are good-to-have, and though they can improve the short intra-city travel, may not be the deciding trigger. There is quite some hope in this market, and there is scope for more than one player, and yes, competition is always good for the consumer.
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