How inter-city cab aggregation is coming of age in India

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 on 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% of travel compared with train at 15% 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% 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, start-ups 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. Start-ups 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

I grew up in an era where my father 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 he
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% of bookings are for today or tomorrow, and only about 10
to 20% 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 start-up 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!

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