
Text and Ride in India - keerthiko
http://www.nytimes.com/2014/07/26/business/international/start-ups-in-india-streamline-auto-rickshaw-business.html?smid=fb-share&_r=0
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ad93611
In Bangalore, rickshaw fares have been going up, while cab fares have been
going down in the past few years. Currently, it costs Rs.13 per KM for a
rickshaw[1] and it costs exactly the same, Rs.13 per KM, for a small cab[2]
during the day in Bangalore. During the night, rickshaw is 50% more expensive
than using a cab.

A cab is clearly a more comfortable ride than a rickshaw. I don't see how the
rickshaw business will continue to operate and grow under these conditions.

Cab services have been growing steadily though.

[1] - [http://www.taxiautofare.com/taxi-fare-card/Bengaluru-Auto-
fa...](http://www.taxiautofare.com/taxi-fare-card/Bengaluru-Auto-fare)

[2] -
[http://www.olacabs.com/fares/bangalore](http://www.olacabs.com/fares/bangalore)

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kamaal
My father is a cab driver and your Math is way off course. In order to break
even, Cab drivers and most travel agencies offering cab services use a mix of
fare systems. If you are hiring a cab for a day, the cab fares are mixture of
'time' and 'distance'. For example, there is a minimum half day charge for 4
hours or 40 kilometer, or multiples of that plus any additional billing for
extra kilometers driven.

Tourist cabs are charged separately.

Autos are far far cheaper than any cab you can hire. But the margin of profit
in Autos is way less, so the general quality suffers.

The reason your Meru's, Ola's or even Uber can offer cabs for so cheap is they
raise enough money to operate on losses. Bankruptcy is pretty common in this
business. Every time I talk to my father about a new cheap travel scheme, he
only asks me to wait for their imminent demise.

We've been in this business for quite some while to understand how this stuff
works. If you wish to understand how sustainable cab business work, have a
talk with the office cab drivers. You will get a peek into the life of people
who sleep for barely 5 hrs/day and drive 300Km/day to make a living on 12000
rupees a month. All while charging a good deal to travel agencies.

Autos are going to make a killing. If you are thinking you are going to invest
your way in to this market, then you are going to be in for a surprise.

There is a saying in my native tongue(urdu): "If you wish to destroy a
person's life, get him to start a travel business'.

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ad93611
The Math is correct. Those are the current prices. You are saying that Olacab
like companies are able to afford to have low prices because they have
investor money to operate at a loss. That may be true too. Yes, it will be
interesting to see who can hold on for longer.

We have a reached a stage where rickshaws and cabs are competing for the same
market segment, within the city.

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kamaal
I have seen at least 3-4 cycles of travel companies going bankrupt in as
little as the last decade. The general attitude is that they think once they
acquire monopoly by offering cheaper fares, then they can charge what ever
they feel like.

But the story always is every time they get close to even say 5-10% of the
market share some launches a competing service. By then you have lost too much
money to make any thing meaningful out of it.

>>We have a reached a stage where rickshaws and cabs are competing for the
same market segment, within the city.

If money isn't a concern for you, then that is true. But for anything less
than 40 km of travel or a 4 hour hire, Autos will win by a big margin.

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TheBiv
Great to see successful products that aren't solely smartphone based.

Minor question, can someone please explain to me what his long pinky finger
nail indicates? The only thing I have ever heard is that a long pinky nail
indicates someone who cuts cocaine, and hopefully I am missing something.

[http://static01.nyt.com/images/2014/07/26/business/26ricksha...](http://static01.nyt.com/images/2014/07/26/business/26rickshaw-
web3/26rickshaw-web3-articleLarge.jpg)

~~~
mike_esspe
It's a signal, that they are not doing manual labor.

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TheBiv
Fascinating! I am glad that I was missing something! Thank you very much for
the background!

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breitling
Unless this service grows the auto rickshaw market (meaning, someone who
wasn't likely to use an auto rickshaw is now using one, thanks to this
service), then this person's gain is another rickshaw driver's loss. This
seems unfair to me.

Rickshaw drivers are typically uneducated and it's plausible that some of them
don't realize this Uber-like service exists and are losing money because of
it. Anyway, my point is, I really, really hope this is growing the market
otherwise we are just taking money away from one driver and handing it to
another (in theory).

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shankysingh
"Olacabs": Cabs service in India, also faced similar deterioration of service
after rapid expansion. Makes me wonder if startup-growth issue or public-
transport culture problem. Because in my experience the heavily politicized
transport trade unions in india, do cause lot of trouble for initiatives like
these.

src: [http://timesofindia.indiatimes.com/city/mumbai/Meru-
threaten...](http://timesofindia.indiatimes.com/city/mumbai/Meru-threatens-to-
shut-operations/articleshow/18053914.cms)

~~~
anandish
Shanky, not the kind of experience you'd have known Ola for. There could have
been some cases of a few inconsistent experience coming your way (surely a
function of scale), but that is minimized to a very large extent with
aggressive sourcing of feedback, audits and quality checks. As such, Ola
doesn't face such issues since it's focus is towards creating micro-
entrepreneurship opportunities for drivers (who own their cars) and work with
Ola purely on a commission basis, but in adherence to strict quality measures.

On a side note. if you have had a bad experience(s), do share up your CRN on
feedback@olacabs.com. The team is generally quick to resolve.

~~~
shankysingh
Hey Anandish, Thanks man will do :)

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ylem
I was in Mumbai a few years ago to give a workshop. The fares to get too and
from my hotel would vary greatly and some of the participants strongly
suggested that I use tabcab
([http://www.tabcab.in/index.html](http://www.tabcab.in/index.html)). It was a
bit pricier, but very reliable. I wonder how this service compares...In some
US cities like Denver, I've tried Taxi Magic, which has been hit or miss.

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selasdia
I can't wait for the launch of the service in Bangalore. You can usually get
ricks anywhere you want during the day, but it's harder to get long-distance
rides from North Bangalore to South Bangalore in the late evenings. I think
these services can connect passengers up with auto-drivers returning to their
homes in the evening across the city and solve an interesting matching
problem.

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taxiguy
We recently (2 months) launched a text based dispatch service in Nairobi

[http://www.sasacabs.com](http://www.sasacabs.com)

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goatcurious
I think Autowale predates Uber (or runs close), guess someone edited the title
appropriately

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louhike
I really like this idea. It will be reallu useful for strangers (as I was as
an intern last summer) as autorickshaws tend to refuse to put the meter so
they can make you pay more.

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Garbage
I met Mukesh Jha, one of the founders, couple of months back in a conference.
It was amazing listening to his story of Autowale.in. His passion about this
was apparent.

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asheinfeld
Another of those, how i didn't think about this moments!

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vijayboyapati
I really love the testimonials :) [http://autowale.in/](http://autowale.in/)

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r_singh
This is such a great thing to do. Thank god they persevered through the trough
of sorrow.

