Being ‘taken for a ride’ while traveling in an Indian cab will be a thing of the past with the proliferation of Radio Taxi services in the country, thus opening up a Rs 7210 crore business opportunity annually. This has been revealed in a study carried out by Dare, a magazine for the entrepreneurs from CyberMedia, in its recent issue.

For instance, in Delhi alone, around 1,000 Radio Cabs are crisscrossing the city. By 2010, the number will swell to 20,000 each in the top 5 metros and 6000 each in the 12 mini metros, according to Dare estimates. This translates into additional deployment of 1,72,000 radio cabs across the country. 

Besides overcoming the shortage of reliable transport citizens could fulfill all their wishes from a cab--doorstep pick-up at the scheduled time, a decent chauffeur with a helpful attitude and an inclination for safe driving, to pay only for the distance travelled without any shortchanging on the pretext of time of the day and part of the city, and above all easy payment option including that through a credit card, the Dare study adds.

“Passenger needs for safety, security, comfort and convenience have translated into a big business opportunity in the form of Radio Cabs,” says Krishna Kumar, Group Editor of Dare, a magazine dedicated to identifying new entrepreneurial business opportunities.

“The total market value of Radio Cab business will well beyond when you add value added services like right skilling existing drivers who will want to be trained as chauffeurs, call centres or even software programs needed to run the back end systems, adds Krishna Kumar.

How the system works?
It begins with a simple call from a customer requesting to hire a cab. The operator, who takes the call, feeds in the information of the caller into the system. Typically, all existing players have over 50 sites, which are the hubs from where the cabs start, and spread across the city as the day progresses. The system monitors the whereabouts of each cab in the fleet, and continually displays this on a screen. This is done using the GPRS-GPS tracking system. 

Once the operator feeds the information, the system takes over. It calculates which one of the cabs is closest to the caller, is available for hire, and calculates the time it would take to reach the caller. In another process, the system only calculates the availability of a cab in closest vicinity, and the operator schedules the operation here on. After this, either the system or the operator informs the caller about the details of the cab – license plate number, driver’s name, wait time etc. At the chauffeur’s end, a hire request flashes on the screen of a device called MBT. All he needs is to press a button to confirm his availability, and inform the hub the time he would take to make it to the customer’s location. 

There is a panic button inside the cab, so that the customer can hit it in case of any emergency or problem. As soon as this button is hit, the call center gets the information immediately. The call centre executive calls up the chauffeur of the cab at once, and insists on talking to the customer. This ensures safety. Another great thing about these cabs is that some of the companies have geo-fencing – a technology that ensures the cab does not go off-route, and that the cab takes the customer to his destination via the correct route(s). This again ensures safety and fair meter charging.

On reaching the destination, the customer is given a printed bill. The customer can choose to pay either through cash or credit card. The call centre system records details of the entire trip, from pick-up to billing. 

Starting off
Rajiv K Vij, MD, Easycabs, believes that the taxi business in India will follow the same pattern of development, as it did in other cities of the world such as Singapore, London, Paris, Toronto and New York. This seems true, given the fact that Megacab has been around since 2002 but it was only in December 2006 that it really took off in a big way. Kunal Lalani, Group Managing Director, Mega Group, elucidates, “It took quite some time to hold talks with the government to put policies in place, as there was no such legislation for something called Radio Cabs. Besides that, more time was taken for people to realise the value of Radio Cabs.” For all this while, the entrepreneurs were in talks with the government to formulate a policy for this business. The beginning of 2007 saw the market open up for Radio Cabs. 

Easycabs did its trial run in June 2006 in Chandigarh with a very small fleet of 50 cabs. It tested the technology, GPRS-GPS system taxi dispatch system, and the overall business model. This was before it got clearance from the Delhi transport department. Easycabs got a fleet of 250 cabs on road on January 1, 2007.

Megacab did not really do a test run. It had been in the market for quite some time. All this time, Megacab kept studying the market and kept adding more cabs to its Delhi fleet. Megacab has around 300 cabs in its Delhi fleet currently. 

Revathi Roy, who owns Forsche, has a different tale to tell. Forsche (homophonous to Porsche, pronounced ‘For She’), is a rather unique player in this business, launched on International Women’s Day in March 2007. It is a ladies-only cab service with lady-chauffeurs – a niche carved within a niche. Roy started the business with a single cab. Even that single cab came on lease, not before a lot of persuasion and shooting down by several companies she approached. “It was only when media started talking about my business that several companies approached me with a good number of cars available on lease,” says Roy. Luckily for her, the cars that she got had pre-installed GPRS trackers. With no real backend, she has 18 cabs in her fleet now – all on lease. She plans to buy her first lot of 6-7 cars soon, and start operations in Delhi this quarter.

Workforce 
Radio Cabs are not mass transportation vehicles. It is more personal as a customer shells out more than he does for a bus or a train. Therefore, offering standard service becomes a top priority. Since the chauffeur is an ambassador of the brand, it is crucial to select the best ones for the fleet. Chauffeurs are taken through training programmes organized by the company. This includes driving skills from institutes such as the one run by Maruti Udyog in tie-up with state governments. As for soft skills, like manners, hygiene, etiquettes etc, it is partly imparted by some external faculty or in-house trainers. For each company’s fleet of say 350 cabs out on the road, there are about 400 chauffeurs working in shifts.

“While we went looking for it in various parts of Europe, North America, and Middle East; we found that technology used in Singapore was by far the best,” says Vij. Even though there is a fleet of 350 cabs on the roads now, the technology implemented by Easycabs holds the potential to handle a fleet of 5,000 cabs. Megacab though went ahead with developing a custom backend. 

If one were to average the sum of money made per cab, in a month, it comes to Rs 3,000-4,000. This revenue allows cab companies to keep fare low and still do good business. Government is trying to frame a policy for Radio Cabs. According to reports, government estimates advertising revenue of about Rs 245 Crore during the Delhi Commonwealth Games. Dare estimates the total advertisement revenue in Delhi alone to be Rs. 120 Crore; with the figures running up to Rs. 600 Crore in 5 metros, and another Rs. 259 Crores in 12 big cities. 

Currently, the government is doing its homework on this issue; meanwhile Radio Cab players are cashing in on ad revenue. 

Social good
Megacab’s “Chalak se Malak” scheme enables high-performing chauffeurs to own the cars driven by them in a span of about 3-4 years. This helps buy Megacab the loyalty of the chauffeurs, excellent service and leads to low maintenance. Eventually, when the chauffeurs do end up owning the vehicle, they would want to remain in the fleet to run their own business. There are about 50 cabs handed over to chauffeurs already, and about 200 more are blocked for the near future. 

Lalani says, “Assuming in a very conservative way, Delhi would have about 10,000 cabs, which is 10,000 self-employment opportunities!” It is a pay-as-you-earn scheme, which lets chauffeurs take home their minimum requirement of Rs 6,000-7000 after deduction of installments. After sometime, he finds herself or himself sitting on an asset worth nothing less than Rs 1-1.5 Lakh. This could encourage them to get other members of their family into this business, and if all goes well, each one might be able to make a monthly income of about Rs 15,000-20,000. 

Even Roy talks about employment for women in Forsche. She is roping in women who can drive and are interested in becoming a chauffeur. Roy adds, “Right now, Forsche has about 18 women chauffeurs. All are above the age of 40 years. Giving an employment opportunity to women of that age is something good! Not that we have any fixed age norm, but this is how it has been until now.” 

According to Dare, Delhi alone will have business worth Rs 1,400 crores in the next five years. Megacab already has its business running in Chandigarh and plans to start the service in Mumbai this quarter. Further, Megacab already has a license for operations in Goa, and is close to getting the license for Hyderabad. 

Vij says he needs about 5,000 cabs in his fleet to cater to the needs of a city like Delhi. Easycabs plans to increase the number of cabs in its fleet to 500 by end 2007. 

Radio Cabs already have managed to secure kiosks at the airport for passengers alighting from flights. Even Indian Railway Catering & Tourism Corporation (IRCTC) has online booking of cabs for passengers in 16 cities i.e. Ahmedabad, Bangalore, Chandigarh, Chennai, Faridabad, Gurgaon, Hyderabad, Jaipur, Kolkata, Mangalore, Mumbai, Mysore, New Delhi, Noida, Pune, and Secunderabad.

Some of the Radio Taxi Companies in India
Easycabs, Megacab, Metro Cab, Dial a Cab, Delhi Cab, Forsche, Spot City Taxi, City Safari, Star City, Wheels Rent a Car

For more information, please contact:
At Strategic Communications and PR 
Sanjiv Kataria
 + 91 98100 48095
Sanjiv.kataria@gmail.com