My Taxi India seeks to do what Ola and Uber opted out of; will it succeed?
While a pitched battle for the lucrative intra-city on-demand cab booking business plays out across the country, another segment of the cab booking market has been relatively quiet. Inter-city cab booking, a service that Ola and Uber tried their hand at only to opt out of it, remains largely what it was, an unorganised fragmented business. Indeed, even other venture funded startups such as TaxiGuide and Savaari have not raised follow-on funding for a while.
Gurgaon-based My Taxi India (MTI) Pvt Ltd is now trying to change that. The online inter-city cab rental service, which recently launched its mobile app on iOS and Android platforms, is looking to expand its services to 200 cities from the current 102 cities by the end of this year.
MTI sees strong traction coming from areas around Delhi, Mumbai, Chandigarh, Indore, among others. It now aims to strengthen its focus on tier 2 and tier 3 cities. "This service is ideal for families travelling in luxury buses, inter-city airport drops, people planning to take trains from metro cities, and for business related trips," says Anshuman Mihir, co-founder, MTI.
Along with this, it plans to have 70,000 vehicles on its platform by the end of 2016. Currently, about 7,000 vehicles are registered on its platform. The company, which claims to be the only outstation cab booking platform that gives real-time and instant inventory and driver details to customers, has an affiliate business model and partners with transport operators. MTI claims to have 300,000 registered users on its platform.
This year it plans to make two to three acquisitions to strengthen its tech platform. "We are in talks with some startups in the technology and GPS space, and would like to make some acquisitions," says Mihir.
With its apps in place, MTI expects to start focusing on digital marketing aggressively, and in the second quarter of the next financial year it aims to advertising campaigns on television and radio.
MTI was founded in 2013 by Anshuman Mihir, Mohit Rajpal, and Satyakam Rahul. It has recently started offering its cab booking services for business travel. MTI says it is witnessing up to 5000 transactions a month on its platform.
"The inter-city taxi market in India is growing at 20-25 per cent," says Mihir. "Inter-city traffic is huge, but at the same time it's highly unorganised." According to market research firm Redseer Consulting, the taxi market in India in 2014 was estimated at $9 billion. The organised sector constitutes around 6 per cent of the overall market.
Compared to intra-city taxi aggregators, inter-city taxi aggregators operate on higher margins. The average ticket size is also bigger, though the transaction volume is lower.
Mihir says it gets a 15-20 per cent commission per trip, with the average ticket size Rs 7000-Rs 8000. "Earlier, our service was restricted to holiday goers, so the average ticket size was higher, about Rs 10,000-Rs 15,000," he says.
The startup is looking to raise capital to fund these expansion plans. MTI is currently in talks with investors to raise $5-10 million in Series A round by March 2016. "In August, we raised funding from Nihon Kotsu at a $10 million valuation, and now we are at a $50 million valuation," says Mihir.
In August 2015, it had got $500,000 in pre-Series A funding from Japanese travel major Nihon Kotsu Travel Service Co. The Japanese taxi company, which has 5 per cent stake in MTI, will participate in the coming round of funding.
Earlier in June 2015, MTI had received seed funding of $100,000 from Green House Ventures (GHV) Accelerator and was part of the latter's 12-month acceleration programme. GHV has 20 per cent stake in the company.
While a few funded ventures such as Meru, TaxiGuide and Savaari, AHA Taxis and Roder do offer booking platforms for outstation travel, the market still remains largely unorganised, dominated by individual taxi operators. Meru Cabs, the largest legacy player which also owns some of the vehicles on its platform, raised Rs 300 crore ($50 million) in 2015 from its existing investor India Value Fund Advisors.
Aggregators Savaari and Carzonrent are also among the early entrants. Delhi-based AHA Taxis operates in 100-plus cities, and is backed by ah! Ventures. In addition, Jaipur-based Hippocabs and Ahmedabad-based Yatayat were also launched last year. Last year travel portal Ixigo acquired inter-city cab aggregator Rutugo.
Meru Cabs' CEO Siddhartha Pahwa says the future of inter-city business will hinge on ride sharing. "Inter-city business is very specialised. The consumer need and driver need is very different from that of intra-city trips."
MTI, however, is unfazed. According to MTI co-founder Rajpal, the backend processes of most of them are manual. "We have developed an algorithm where we empower the taxi operator by deploying a software in their system, which requires less human intervention," he adds. "All bookings are via mobile app and website, our call centre just has four people, and finance is automated."