Bike taxis are popular in Indonesia and Thailand, where they weave through traffic jams to get people around in a fraction of the time a cab takes.
Hi Everyone Today We Will Talk About the Struggles of Bike Taxi Startups
In India, bike taxis are finding it tough. Most of the players in major markets like Bengaluru and Gurugram, that started over the past few years, have shut down. While only a few states provide for commercial bike-taxi licenses, the lack of clarity on regulations is not the only reason for these failures.
The poorly funded local players have not been able to match the heavy subsidies to customers and drivers by players like Uber and Ola, which makes them unattractive to both segments.
Also, the market itself does not appear to be growing rapidly, probably the reason why Uber and Ola too do not seem to be taking the segment seriously.
Haryana provides a commercial bike taxi license, but most players in the state including Yaya, Dot, TuWheelz, Rideji, have stopped operations. Bikxie and Mtaxi have shifted focus to deliveries.
Most Bike Taxi Ventures Shut Operations
Baxi, founded in November 2015 by Manu Rana and Ashutosh Johri, looks to be among the last ones standing. In Bengaluru, companies like Headlyt, Heybob, and Zingo have shut down.
Even Uber has gone cold in cities like Ahmedabad and Hyderabad, where it launched bike services with great fanfare.
“We were not able to make progress with regulators for appropriate regulations. We continue to have conversations and whenever the time is right, we will relaunch bikes,” Uber India president Amit Jain said. He added that the company plans for a relaunch in Bengaluru soon.
Heybob founder Vishal BM said soon after the venture closed that they tried moving from a consumer business to a business-to-business (B2B) model.
“But it was too late, as we ran out of cash. With investor sentiments down, we were helpless,” he said. Baxi and Rapido have secured funding. Rapido has raised money from angel investors, including Google India MD Rajan Anandan.
Baxi Plans to Launch Cab Aggregating Services
On-demand bike hailing startup, Baxi is launching a separate cab aggregating app across seven cities including Delhi, Ghaziabad, Gurgaon, Mumbai, Pune, Chennai and Bengaluru. The Gurgaon-based 74 BC Technologies, which runs Baxi will act as the technology provider for the app which will be available free of cost for the cab drivers.
Fares on Baxi will be regulated by a committee formed of the taxi unions across these cities. “We won’t take any commissions from the drivers to use our technology platform, which means that 100% of their revenue will come to them directly,” said Ashutosh, Johri, Co-founder of Baxi and an IIT Delhi alumnus. The app will be launched with around 1,000 cabs with a base fare of ₹50 and ₹9 per km thereafter along with ₹1/minute wait charges.
Recently, former Karnataka CM HD Kumaraswamy, said he was investing in HDK Cabs, which would charge a fixed fare from riders and will be run by drivers who have been agitating against the falling incentives on cab aggregators Uber and Ola.
The Baxi app will be available on Google Playstore and AppStore and will allow customers to pay using digital wallets including Paytm and MobiKwik or through cash. The app also allows customers to hail a cab off the road.
Indonesian GO-JEK is one of the most well-funded bike taxi startups globally having raised $550 Million from investors like private equity giants KKR and Warburg Pincus.
Baxi’s Johri said that the company observed the issues with the existing aggregator model and the drivers on these platforms. “This model is highly flawed, that’s why we thought of reinventing it and used our learnings to design a better mobile app for the drivers.” He said their model will give drivers the true freedom to work and earn at their own pace, without being dictated by unsustainable and artificial incentives.
The taxi driver unions are expecting the app to help them address issues over which they had been agitating against Ola and Uber in recent months. “These foreign funded cab aggregators have been playing with the lives of our cab drivers, by reducing our earnings. We are now taking matters into our own hands, and are providing a solution for all the cab drivers to earn well, with dignity,” said Praful Shinde, leader of the taxi union at Mumbai.
Baxi founded by Johri and his batch mate from IIT Delhi, Manu Rana, began operations in Gurgaon in December 2015 with the launch of bike taxi services. It is one of India’s first two such companies Having already rake in ₹9 crore from Dalmia Group, HT Media, and a set of angels, Baxi is also in talks with investors to raise a Series B investment of $7.5-10 Million.
New App Based Cab Aggregator to Take On Ola & Uber
Commuters in the NCR will soon be spoilt for choice. Expect a price war, with yet another app-based cab aggregator services about to be launched, to take on biggies Uber and Ola.
It is a story, of a 17 Year Old school dropout from Gurgaon. Sahil Arora, who left Pathways School, Gurgaon around a year back after Class XI, will launch his cab aggregator, Cabby, in Delhi.
Arora says he will launch the aggregator with 25,000 operational cabs in the NCR and move to Bengaluru next. “I had the idea of launching my own cab aggregator during the recent strike by cab drivers. I’m offering a better business model that is not vulnerable to external forces,” said Arora. He got in touch with driver unions and convinced them of better income and services if they came on board.
The business model relies heavily on drivers. The young entrepreneur plans to divide the 25,000 cabs into different fleets and will appoint a union leader as an operating manager for each.
“Making union leaders the operation managers will help us keep a tab on drivers and also hold them responsible in case of accidents and contingencies,” said Arora.
As a part of incentives to lure drivers, Cabby will provide them with an accidental insurance cover of ₹10 lakh, and free tabs after 2 months of working with the aggregator. “Drivers feel betrayed by poor commissions doled out by the biggies, and have been complaining of insufficient income of late. We’re building a model where they feel valued, because the business depends on them,” said Arora.
The base fare for the service will be ₹37.50 for the first 2 km, and ₹12.5/km thereafter, which, Arora explained is actually very competitive, as when everything is added up, the prices charged by Ola and Uber come to much higher than promised.
Cabby is not Arora’s first venture. He has two start-ups to his name already. The first one, Tabverts, provides digital marketing services within cabs, and has received investment from Indus Ventures. The second is Vezulaa, a tech firm that launched an app allowing one to scan the iris with a smartphone camera. The technology was patented.