Market Study of Taxi and Auto Aggregators

Introduction
The market place of Indore is comprised of total 19.9lacs (as per 2012 Census).
Around 60% of population is dependent upon the public transportation for
travelling. The transportation system includes city bus, i-bus, magic, van, auto
rickshaw etc. Indore has no dearth of public transport options with Buses, Mini-
buses, Tempos, Auto-rickshaws and City-vans at your service. However, the
recent boom of radio cabs has added to the comfort, convenience and safety of
traveling in the star city of Madhya Pradesh.
Currently, there are a few options for cheap radio cabs in Indore. They can be
booked through mobile apps.

Common features of all radio cabs:

 Air conditioned cars including hatchbacks and sedans
 Cabs trackable on GPS
 Tamper-proof electronic meters
 Electronic receipts after completion of the journey
 Free referral rides
Ola Cabs
Operation of OLA: India, UK, Australia
Facilities offered by OLA
Drive with Ola:
 Choose your own working hours
 Daily payments 365 days
 24/7 helpline for your support
 Choose from 100+ cities to work in
 Get a booking on your way home
 Trusted by lakhs of partners daily
Lease a Car:
 Get a car at zero-risk
 Drive a new car of your choice
 Zero maintenance cost
 Free accidental insurance of 2 lakhs
 24/7 helpline for your support
 Two paid holidays each month
Attach a Fleet:
 Get detailed reports of total earnings
 Live tracking of all your drivers and cars
 Check your fleet’s performance anytime
 Get alerts like payments, logouts, etc.
 Receive 24/7 phone support\
 Monitor driver logins and other trip details

OLA Statistics
Number of Ola Customers Globally – 150 Million
Market Share of Ola (as on Feb 2018) – 56.2 %
Total No. of Drivers – 1000000 (as per Ola Website)
Ola total rides on daily basis - 1.5 Million (as on April 2018)
(https://expandedramblings.com/index.php/ola-statistics-facts/)

Revenue Lines of Ola

• Fleet Management via Tele Sales
• Percentage Commission from Trips being served through its platform
(Trip Based Commissions)
• Money Wallet in Ola app
• Ola Cafe (Food Delivery)
• Ola Store (Hyper Local Grocery Delivery)
• Corporate Tie Ups / Event Tie Ups
• Vehicle On-Boarding Fee
• In-Cab Advertisements
• Fleet Leasing (To Drivers)
• Car Type
• Peak Time Charges

The Trip fare is a combination of:

• Travel Time (In Minutes) : Ola charges every Minute of Travel Time
following an underlying free X minutes
• Distance Cost: Ola charges Per KM of Travel after an underlying settled
admission Distance (shifts according to the sort of taxicab)
• Waiting Time: on the off chance that you influenced the driver to hold
up, extra holding up time charges are imposed to you
• Service Tax on the aggregate trek charge

 The Trip fare once charged to your ola money wallet is credited into the
driver’s account under the head of the trip number given to you in your
bill copy if paid via cash then equivalent amount of cash is deducted
while making payment to driver for the conducted trips.
Ola deducts the Service Tax charged to consumer first, then its
commission percentage, then applicable income tax on the balance
amount and remits the rest of the amount to the drivers bank account at
regular intervals (3-7 Days )
• Assuming Travel Cost Per Minute : 5 INR (Travel time 40 mins)
 • Travel Cost Per KM : 15 INR
• Service Tax : 14.5%
• Total Travel : 30 KM, (First 5 KM @ 100 INR)
• Total Fare : 100+ 40*5 (Assumption 1) + 25*15 (Assumption 5 & 2) =
100+200+375 + = 675 + 14.5% of 675 (ST) = 675 + 98 = 773 INR
• Ola;s Commission : 675 * 20% = 135 INR + 98 (ST – Payable to Govt)
• Driver’s Payout : 773 – 135 – 98 = 540 INR Less 10% TDS (As per
Income Tax Act) = 486 INR.
(https://futureworktechnologies.com/how-ola-works-business-revenue-
model)

Jugnoo
Founded in November 2014 by a handful of IITians, Jugnoo began as India’s first
auto-rickshaw aggregator with the objective of making daily commute easy and
reliable. After bringing the on-demand revolution to daily commute, we expanded
our vision and dream of touching everyday lives in a much bigger way. With
10,00,000 transactions per month across 45+ cities, what began as a small
company in 2014 is now spearheading the evolution of the local Indian
marketplace into a Digital Reality. Jugnoo now provides a wide range of local
services on-demand - Auto-Rides, Groceries, Food Delivery, Meals, Logistics
and even a location-based local social network!
Rides- 29 M
Cities- 120+
Users-8 M
Drivers on board- 0.1 M
Revenue Model
Jugnoo charges a commission back from the drivers. The commission rate is 10%
of the ticket size in most cities. they run a number of incentive schemes for the
drivers, this again is based on the stage of maturity in a city and the engagement
level of the drivers. It is trying to build efficiency in the market where the final
income of driver through Jugnoo should increase to significantly more than what
they were earning on the road and the customer get a predictable and cost-
effective medium of transport. For food delivery, the company charges merchants
a commission and pays the auto drivers for delivery.
(https://startuptalky.com/jugnoo-indian-startup-success-
story/#jugnoo_business_model)
 Uber
Uber has 2 types of cabs available in Indore. UberGO is the cheapest option at
Rs. 5 per km and Rs. 1 per minute of travel.

UberGo (Hatchback)
 Rs. 40 base fare +
 Rs. 5 per km +
 Rs. 1 per minute

Uber X (Sedan)
 Rs. 40 base fare +
 Rs. 8 per km +
 Rs. 1 per minute.

(https://www.happy-journey.com/cheap-taxi-in-indore/1461)
Revenue Model
Dividing the profits - Uber divides the fare, usually 80% to the driver and 20% to
Uber. Even after a 20% pay cut, the taxi drivers earn more than the traditional
taxi services. In some cities Uber had to reduce its percentage because of
competition. It is estimated that Uber have to lower its profit in all the cities it
operates in coming months.
Normally, the cash collected by each journey in a ride is the only source of
revenue for a cab company, but Uber’s revenue model is based on a variety of
factors. It makes money through the customer’s trip commission. Uber takes
around 20 % of the fare charged to the customer, and the rest 80% is given to the
driver. The company sometimes charges 1.5X, 2X, 3X or even more based on the
demand of the passengers. The trip fare is a combination of travel time (calculated
in minutes), waiting minutes, and distance cost. It also makes revenue from the
cancellation of rides by the passengers, which is collected in their next ride and
by advertising other products on the app.
Uber has provided multitudinous cab models for their Cab services. Moreover,
their pricing algorithm used in the variation of cab fares, i.e. when the demand
increases, per mile prices, are automatically increased has led to a great increase
in their revenue.

Questions
 What is the total no. of taxis and auto’s registered into your company in
Indore?
 What is the total no of drivers as per the vehicle?
 What is procedure of joining in your company?
 What is expected earning per month of an individual driver?
 Is there any targets given to the drivers in terms of rides?
 What is the payment policy adopted by the company?
 What is the percentage share in each ride to the driver and the company?
 What is percentage earning by OLA and other from one ride?
 What is the average Rides taken by single driver on daily basis?
 What is the average distance covered by an individual driver?
 What is the average no. of rides completed by a driver in a month?
 What is the average no of ride per day?
 Major competitors in the city
 Is there any additional facility given to drivers like maintenance, medical
etc.?
 Is there any time limit of working of an individual driver?
 How the fare price of ride is decided?
 Which mode of payment is more preferable for drivers?

Title- Need gap analysis of online taxi aggregation business

Sub title- Study for Scope of new entrants in local market
Things needs to be done (bullet points)
1. Need of industry
2. A write up on industry revenue model
3. Industry scenario
4. Key market player
5. Present condition of market player in Indore
Need for new entrants
Average trip length
Average trip per driver
Excel- to make pricing estimate (km, per km, tax, base fare)
Average per km fare
Google advance/ linkedin search/ your story/ the can.com/ why combinator/
satrup.in/
Factor that need to be studied
1. Aggregator
2. Driver
3. Consumer
4. Government regulator/ laws applicable (RTO)
5. Investors
Pain points (problems) for business model
Data collection (multiple option related)
 Users (consumers)
Age, gender, location, job-business, trip purpose, trip
frequency(segments), average trip length, type of service provider
(rank), type of cabs, day-night, mode of payment, prefernces, car
pool/share ride, features( insurance,security,facility), emergency,
customer care services (category), drivers related question, driver
earning, commission (percentage), problems faced with aggregators
(payment, cancellation, peak time charges, late arrival, untrained staff,
poorly maintained cars)
Questionnaire for Passengers