According to Statista, a leading provider of market and consumer data, the app-based ride-hailing market in India is currently estimated at $675 million. By 2023, this figure is expected to reach $1.3 billion.
Dominated by Ola and Uber, this market is concentrated in Tier I cities. Even though these startups have found their way to Tier II and III cities, vast swathes of urban India remain untouched by these services.
In a country where the public transport infrastructure struggles to service the last-mile connectivity needs of consumers, TukTuk Ride, a Noida-based startup, has emerged to service consumers in cities and small towns outside our metros.
Speaking to The Better India, Yash Kapoor, the Founder of TukTuk Ride (TTR), recognises the massive market beyond metropolitan cities. With the proliferation of internet connectivity and smartphones in these parts, these consumers, Yash believes, are aware of the benefits of app-based ride-hailing services.
“The taxi aggregators so far have focused on the top 10-12 cities and tapped into urban demand to become more visible. I have spent months taking cab rides in Delhi-NCR and spoken to hundreds of Ola/Uber drivers. Most were unhappy because companies don’t focus on them. They are busy chasing customers. So, we decided to build TukTuk as a driver-centric platform,” says Kapoor.
TukTuk is a driver-centric application, fulfilling the baseline requirements of the drivers, their “blue-collared business partners and cars.” Kapoor continues, “We are successfully running in Noida with 5,000 driver partners. We hire 5-10 year experienced, well-trained drivers who are familiar with the routes. The drivers register with the company, providing their personal and professional details. The company, in turn, follows a policy of training its chauffeurs in road safety, consumer etiquettes, and technology.”
Incorporating TukTuk Ride on January 14, 2019, after undergoing a 10-month development period, Kapoor has previously worked in the insurance, real estate and food business sectors.
With the proliferation of Uber and Ola in the big cities, Kapoor discovered a business opportunity in smaller cities and towns. “We plan to build an end-to-end transportation network in the small towns of India where smartphones prevail, but app taxis are absent,” he claims.
Their core proposition is to provide “cabs at the price of an auto”. The customers are charged a flat rate of Rs 14 per kilometre, and there is no surge pricing or cancellation fee.
Additionally, the first ride is free.
TukTuk also lets riders hail bike taxis at Rs 8 per kilometre. In a bid to acquire driver partners, the startup charges zero commission from its 5,000 drivers. It also urges riders to make cash payments to ensure immediate earnings for the drivers. Wallet payments will soon be enabled, though.
For TukTuk Ride, the objective is to first get their drivers on board.
“They are blue-collared business partners, who have bought vehicles costing Rs 4-5 lakh. We don’t want unhappy drivers on our platform. If we can have one lakh satisfied partners, we’ll be successful because they will be loyal to us,” he adds.
It’s apparent that the 28-member startup is currently losing money for every ride on the app. Moreover, the startup has received no external funding and is bootstrapped.
“But we are definitely looking forward to some. Our pitch is for small towns in India where people pay auto prices for cab rides which naturally leads us to lose money per ride. But we are not looking at margins right now. By 2020, when all partnerships and contracts will fall in place, we will be cash-positive. And eventually, we will start charging driver commissions too. As for riders, we are telling them to wait five minutes for a cab instead of two minutes for an auto. The rate is the same,” says Kapoor.
Their services in the Delhi-NCR region have notched up over 1,000 users already.
The platform completes 150 daily rides and asserts that there are plans to take that up to 10,000 by the end of the year. There are more than 4,000 vehicles (3,500 cabs and 550 bikes) in its present fleet, to be scaled up to 1,00,000 by 2020.
“We plan to roll out the application and services in Indore, Bhopal, Kanpur, Lucknow, Jaipur, and Udaipur by the end of the year. And by 2020, TukTuk will ride into 20 small towns. We are also looking forward to expanding to other verticals such as luxury cars, vintage cars, e-bikes, delivery vehicles, ambulances and more. The idea is to build an end-to-end ‘transportation network’ as opposed to just a taxi service,” says Kapoor.
When asked about data privacy, the startup claims to follow “strict guidelines” to secure customer and driver data, an imperative in today’s smartphone-heavy world.
“TukTuk also takes concerns about women’s safety very seriously. We have a 24/7 helpline besides other features on the app,” he adds.
Despite uncertainties that arise with the emergence of any new startup in a competitive business environment, there are two facets of this app-based ride-hailing entity that stand out—servicing small cities and towns, and a focus on driver partners.
Where Ola and Uber disrupted the organised taxi market in the big metros, TukTuk Ride is looking to do the same in small cities and towns. How far they’ll go remains to be seen.
(Edited by Shruti Singhal)