tfs report
TRANSCRIPT
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7/31/2014
Second Part of Project Submitted to Prof. G. Shainesh
Submitted by
Anshuman Pandey, Vineetha Sankaranarayanan, Debesh Swain and
Abhishek Pandey
GROUP 6 MARKETING STRATEGY OF TAXI FOR SURE
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Evolution of Radio Cab Industry in India
Around 10 years back, if a person got down at the train station, the most preferred mode of
transport was the auto rickshaw. He/She would head to the nearest auto stand hauling the heavyluggage to hail an auto rickshaw to reach the destination, but as was most often the case, the driver
denied to go by meter and would demand a fare that would be exorbitantly high. The other drivers
also part of the same cartel system would demand similar fares and the traveller would be left with
no other option than to pay the higher fare to avail the service.
The scenario has been changing since 2006-07 when Meru and Easy cabs started their business, and
radio cab industry took off in India. These players capitalized on the gaps and weakness in the
existing auto rickshaw segment. The main complaints against auto drivers were the bad attitude
exhibited, meter tampering and rude behaviour to customers.
The new players opened up alternatives to customers by introducing radio cabs with a promise to
provide high quality service with customer security and accurate meter reading. The absence of
adequate public transport system, unavailability of required number of cabs, increase in incomelevel of middle class population and growing population in cities act as reactor for growth of Radio
Cab industry. Since then a lot of players have entered the industry making the Indian Taxi market
worth $6 billion - $9 billion. Out of this 4-6% is organized and 96-94% is unorganized. The organized
players have high technology, marketing skills and infrastructure to serve the customer in a better
way.
Radio taxi service in Indian market has been witnessing massive year-on-year growth since 2009. Theradio taxi services market revenues are forecast to grow at about 25% during 2014-19 on account of
rapid urbanization, increasing demand from corporate sector, growing per capita income coupled
with various benefits offered by Radio Taxis such as enhanced passenger comfort and security as
well as GPS/GPRS and internet connectivity.
However, the demand still exceeds the supply. The organized sector many a times fails to reach to
the customer on time .Sometimes they have to cancel the orders due to lack of resources. To
alleviate these problems a new set of players have entered the market, the Aggregators.
There is a marked shift from Asset-Owner-Operator model to the Aggregator model in recent years.
Aggregators follow asset light model. The aggregator model taps into this unorganized sector.
Aggregators do not own cabs but they have a network of partners either drivers who own and
drive a single car, or operators who have a number of cars and drivers on their pay-rolls and they
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provide technology and customer service to the players from unorganized sector. Typically, each
vehicle in the aggregators network is provided with a GPS device/phone that is used for
communication and metering and is integrated with the company s IT system. This device costs
approximately Rs.9000 and is paid for either by the partner or the aggregator, depending on their
business arrangement. The partner has the option to log on to the aggregators system only when he
or she wishes to. Any business obtained from the aggregator is in addition to his or her existingbusiness. With this model, drivers who have tied up with aggregator have considerably shorter
periods of waiting for a passenger.
The aggregators work on a commission model and get 10-20 % per trip. Good customer service is the
key differentiator in the aggregator model. Taxi market is being funded by various angel investors,
venture capitalist. Here are some of the VC/Angels backed players in this sector.
Taxi For Sure, the aggregator
The business idea was sparked when two friends Aprameya Radhakrishna and Raghunandan G(batch mates from IIM Ahmedabad and NITK Surathkal) met up for a drink. Both of them were
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frustrated with the fact that each time one needed a taxi, he had to call two or three operators,
hoping that he'd receive a taxi sometime in a two or three hour time frame. Initially they wanted to
develop a meta-search engine that would provide a list of different taxi operators. Further
brainstorming resulted in the idea to be an aggregator for the radio taxi industry in India.
Taxi For Sure started its operations in June 2011 in Bangalore. It attempted to make travel easier for
anyone who needs a taxi on time. The founders believe that the customers deserve a betteralternative to choose from vast pool of available taxis and not call 2 to 3 operators with the hope of
getting the right taxi when they need one.
As an aggregator, TaxiforSure works with various taxi operators and enables them with technology
to ensure customers get an easily accessible, safe & reliable taxi ride for sure with a focus on
offering customers the most comfortable and cost-friendly service possible, build the customers
confidence that his/her taxi will arrive on time and that they will not be over charged.
Taxi For Sure started its business with small fleet owners and single car owners. Although these car
owners register with Taxi For Sure and put the Taxi For Sure brand name/logo on the taxis, they are
still allowed to take up non company rides. For every Taxi For Sure initiated ride they need to pay
Taxi For Sure 20% as commission. Gradually many owners from organized sectors also getthemselves registered under Taxi For Sure. Taxi For Sure takes a commission of 7-10% from these
owners.
This way, the start-up has access to 900-1,000 cabs in the organised segment and another 500 in the
unorganised segment.
It is a win-win situation for all. Taxi For Sure generates revenue by commission, the registered
operator earns more as he gets more number of rides, and the passenger doesnt feel overcharged.
Taxi For Sure with the help of its 300 employees books more than 3000 bookings per day with its
1500 cars as inventory from more than 100 operators. It has already served around 300000
customers with around 1.5 million rides.
Radio Cab Market and Taxi For Sure
Segmentation, Targeting and Positioning
TaxiForSure has its presence in Tier I cities where MNC executives, IT sector and BPO employees,
affluent Indians want a faster and smoother means of transport and they are willing to pay extra
charges for that. With spread of software industry into tier II and tier III cities, TFS seeks a potential
market there. Mostly these software industries have clients visiting frequently and this is one
segment where radio cab market plays an important role. With changing lifestyle and customer
value system Taxi For Sure has a potential market in the tier II and tier III cities.
Also in few other cities where tourism is an important part of state revenue, TFS has its presence
there. Considering different customer needs there are different kinds of cars (economy, luxury, and
premium) with different per kilometre fare slabs.
TFS approached the non organized sector where the cab operators had neither hi-tech technology
nor formal customer service unit. Since then it has spread its business in the tier I cities like
Ahmedabad, Chennai, Hyderabad and Delhi where there was a need by corporate office goers,
frequent fliers, travellers, pub hoppers etc. for a smooth and assured riding.
TaxiForSure has identified various segments to target their offerings.
Point to Point
Auto-rickshaw operators are facing stiff competition from taxi services. Taxi services have emerged
as a force in cities where autos once dominated local commutes. Taxis in Bangalore have begun togive the unreliable auto-rickshaws a run for their money by launching economy services for short-
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distance commutes. Taxi for Sure has entered the short-commute market in Bangalore offering rides
that are competitively priced, reliable and comfortable against auto-rickshaws.
TaxiForSure has devices installed in cabs which accurately measures distance travelled and fares. It
reduces the complication on drivers part for calculating fare. In addition there is no negotiation for
price but greater transparency and ease for driver & customer.
AirportBus Station Pickup/Drop (35-40% revenue source)
Most users prefer taxis over other modes of transport especially for airport pickups/drops. In cities
like Bangalore, where the airport is out of city, taxi has monopoly due to non-availability of other
options. TaxiforSure has tied up with MakeMyTrip to tap into that sites customers. It is also in talks
with redBus for the same. The partnerships would allow a customer who books a bus ticket on
redBus or an airline ticket on MakeMyTrip to also book a taxi for the airport or a bus depot pickup
and drop. In this way, it offers the customer a complete door-to-door travel solution. For
TaxiForSure, it expands their pool of customers.
Outstation Travel
The Outstation travel bookings are handled mostly by local travel agents and are part of theunorganized sector. Taxi For Sure has ventured into this space as well and provides competitive rates
for outstation travel.
Taxi For Sure Target Market
TFS analyzes different needs and groups in the market place and targets those it can serve in a
superior way and positions its offering so that the target market recognises the companys
distinctive offerings and images.
Taxi For Sure mainly focuses on modern educated customers who use internet, social media and
smart phones. Although people book cabs through their infamous number 60601010, most of thebookings comes through smart phone app and website booking.
Taxi For SurePositioning
TaxiForSure is a technology-driven platform that enables all operators whether branded or local to
control their fleet of cars. Currently, there are no aggregators in the market who are engaged in
aggregating both branded as well as local taxi operators under an umbrella.
Taxi is a time and space complexity. When a cab request is made, all free cabs in a 5 kilometre radius
are alerted. Taxis can bid for a trip and a bid resolution algorithm assigns a taxi to a trip. Theresolution is based on parameters like how long has the taxi been waiting, how much it has earned,
customer feedback and the distance from the point of pick up.
There are different ways to book a taxi Call Centre/ Online booking and using the TFS app.
Currently about 30% are online and the rest are on the phone. Taxi For Sure app is available on both
Android and IOS based devices. When the user books through this app, the geo location sensor
captures the location of customer. Then Taxi for sure sends the request to the nearby registered free
cabs. Out of all those who bid to accept the ride request, the closest driver is provided the
instruction for the pickup and the driver is provided with the requester's location details. As Taxi for
sure has huge amount of moving inventory throughout its operating city, it is always easier for them
to reach to customer ASAP. With the help of python based application on the device that the driver
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has in his/her car, he/she can view the traffic condition throughout the city and take appropriate
route to reach the customer.
Before Taxi for sure came into the industry there were players like Meru Cabs, Mega cabs, Easy Cabs,
Ola Cabs in the radio cab sector. They had their own set of loyal customers. Although the main
purpose of Taxi for sure business is same as the existing players, it position it's service with instantfulfilment of a taxi ride with assurance of providing taxi to customer any time anywhere that suits
the customer's exact need .
Marketing Mix for Taxi For Sure
Product/Services
TFS provides service for below transport requirements
AffordableAirport Transfer services
Outstation Trips Service Local car hire services
Corporate Cab & Taxi Booking services
Economy car rental services
Standard cars for hire,
SUV rental service in India,
Luxury Car rental service in India,
Premium Car rental service in India
Be it any occasion (like anniversary, conference, pilgrimage, group trips, wedding) Taxi For
Sure provides its service through various kinds of vehicles offering in various ranges such as listed
below
Economy car
Tata Indica, Santro, Eeco, Wagon R, Hundai- Santro, Maruti-Swift,Maruti-Wagon R
Luxury car
Honda Accord, BMW 730, Toyota Altis, Skoda, Mercedes-viano, Toyota-corolla
Premium Car rental
BMW (series 3, 5,7), Mercedes(C, E), Audi (Q5, Q7), Jaguar (XJ),Rolls Royace(Phantom)
Standard car (which isn't economy but still not too many frills attached to it either)Hyundai(Accent), Maruti(SX4,Versa, Esteem, Dzire), Tata Indigo, Ford(Fiesta, Ikon)
SUV (for outstation trip)
Honda CRV, Toyota (Fortuner, Innova), TATA sumo, Chevrolet Tavera, Mahindra Xylo
Place
TFS has already launched its service in major some metros Bangalore, Delhi, Chennai, Hyderabad
and recently Ahemedabad.
While cab aggregators are entering metro and tier l cities, not many of the players are foraying into
smaller cities. sees significant growth potential in tier ll and lll cities like Raipur, Nagpur, and Ranchi.
The disposable income is increasing in these cities and many premium services and hotels are beingestablished, indicating that customers have an appetite. The growth of corporate entities and
http://www.taxiforsure.com/airport-transfer-service/http://www.taxiforsure.com/intracity/http://www.taxiforsure.com/corporate-booking/http://www.taxiforsure.com/economy-cars-rental-service/http://www.taxiforsure.com/standard-cars-for-hire/http://www.taxiforsure.com/suv-rental-service-in-india/http://www.taxiforsure.com/luxury-car-rental-service-in-india/http://www.taxiforsure.com/premium-car-rental-service-in-india/http://www.taxiforsure.com/premium-car-rental-service-in-india/http://www.taxiforsure.com/luxury-car-rental-service-in-india/http://www.taxiforsure.com/suv-rental-service-in-india/http://www.taxiforsure.com/standard-cars-for-hire/http://www.taxiforsure.com/economy-cars-rental-service/http://www.taxiforsure.com/corporate-booking/http://www.taxiforsure.com/intracity/http://www.taxiforsure.com/airport-transfer-service/ -
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construction of new airports will only fuel the demand. TaxiForSure targets to spread its services in
other cities of North, South and West India by the end of this year. Their expansion plans include
establishing their services in 15 cities by the end of next financial year.
Price
Taxi For Sure offers extremely competitive pricing rates for various vehicles. Fare chart is as below.
Bangalore
Taxis
Tata Indica
Non-AC
Tata Indica
ACSedan
Xylo/Toyota
Innova 6+1
Toyota
Innova
7+1
Point to
Point
6AM-9PM
13.0 / km
( 200.0 for
the first 10 km)
14.0 / km
( 200.0
for the first10 km )
16.0 /
km
( 200.0
for thefirst 10
km )
16.0 / km
( 300.0 for
the first 4 km)
9PM-6AM
14.0 / km
( 250.0 for
the first 10 km
)
15.0 / km
( 250.0
for the first
10 km )
17.0 /
km
( 250.0
for the
first 10
km )
16.0 / km
( 350.0 for
the first 4 km
)
Airport
To
750.0 Flat
OR
14.0 / km( 650.0 for
the first 30 km
)
800.0 OR
14.0 / km( 650.0
for the first
30 km )
850.0
OR 16.0
/ km( 700.0
for the
first 30
km )
From
650.0 OR
10.0 / km
( 450.0 for
the first 30 km
)
700.0 OR
14.0 / km
( 600.0
for the first
30 km )
850.0
OR 16.0
/ km
( 650.0
for the
first 30
km )
Hourly
Package4H 40KM
500.0
( 10.0 for
extra km
100.0 for
extra hour )
600.0
( 11.0 for
extra km
100.0 for
extra hour
)
750.0
( 12.0
for extra
km
125.0
for extra
hour )
1100.0
( 12.0 for
extra km
125.0 for
extra hour )
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8H 80KM
1000.0
( 10.0 for
extra km
100.0 for
extra hour )
1100.0
( 11.0 for
extra km
100.0 forextra hour
)
1300.0
( 12.0
for extra
km
125.0
for extra
hour )
1900.0
( 12.0 for
extra km
150.0 for
extra hour )
1900.0
( 12.0
for
extra
km 150.0
for
extra
hour )
OutstationMIN.
300KM/DAY 7.5 8.0 10.0 12.0 13.0
This is the rate chart for Bangalore City. Likewise they have different rate charts for different cities
like Hyderabad, Chennai, Delhi and Ahmadabad. They have premium rates for luxury cars which are
mentioned above.
Promotions
Taxi for Sure does extensive advertisement on various online platforms. Some of the examples are
given below:
1) Google search of word Taxi gives the first link of Taxiforsure.com website.
2) Advertising on websites which are frequently accessed by public
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3) Facebook
4)
Twitter
5) For our millionth customer, TFS sent Jaguar instead of the Indica.