The radio taxi service has emerged as a fast growing business in metros. Less than a decade old, it consists of private operators backed by call centres to man the calls, aggressive fleet acquisition plans, latest gadgets and technology and hiring as well as training modules for drivers.
The larger players in radio cabs include Meru, Ola Cabs, Easy Cabs and Bookmycab.
Analysts estimate that the segment has already attracted more than Rs.1,000-crore investment from private equity players and venture capitalists.
Meru Cabs CEO Siddharth Pahwa told this correspondent that of the total $13-billion Indian taxi industry, only 5 per cent was organised. “At present, radio cabs are in about 11 cities and only around 35 Indian cities can absorb radio cabs. The radio cabs industry is growing above 35 per cent and the organised segment can grow to 25 per cent in five years.’’
The business models are the ownership model and the aggregator model, where the operator gives the back-end infrastructure and technology and individual permit owners join the fleet. Permit costs vary from Rs.2-3 lakh in Mumbai to Rs.50,000 in other cities. “The radio cab industry is an inflexion point, and we will see consolidation over the next few years,’’ Carzonrent Managing Director Rajiv Vij said. PE player India Value Fund Advisors is on the board of Meru. According to Mr. Pahwa, Meru’s new low-cost module Meru Genie, whose fares are at 20 per cent discount to its regular cabs, is doing very well. “We are in five cities, and are growing at 30 per cent monthly.’’
Carzonrent plans aggressive expansion
Carzonrent sold its car lease division with a fleet of about 2,000 cars to Sumitomo group company on Tuesday. It offers EasyCabs Radio taxi and MYLES Self Drive services. It plans to to invest around Rs.2,000 crore in 3-4 years to grow its network from 39 to 100 cities within India and in the process of taking its fleet size from 7,500 to 30,000 cars.
“For EasyCabs, this year we will invest around Rs.150 crore to go from four cities to 39 cities,’’ Mr. Vij said, adding that “we will add 2,800 cars this year. We also offer 400 luxury cars for our Limo service — and this year, invested Rs.60 crore to acquire 120 Mercedes cars. We are seeing 30 per cent plus growth in the segment, and it will accelerate.’’
