Radio Cab Business Set To Zoom On The Fast Lane

The boom in the e-commerce sector in India is suddenly throwing up unlikely winners. The radio taxi business is one such winner. All of a sudden, a number of service providers have mushroomed, each claiming to provide the cheapest and best service. The fast-growing business is attracting big funding from global players. Ola Cabs recently raised over Rs 1,200 crore from Japanese internet and telecom giant SoftBank and other investors like Tiger Global, Matrix Partners India and Steadview Capital. India's biggest taxi service provider - Meru - is also evaluating funding requirements. The radio taxi business has also emerged as a destination of choice for premium talent. Siddhartha Pahwa, CEO of Meru Cabs told NDTV that people who have worked in companies such as Unilever, Johnson & Johnson and Microsoft are joining radio taxi companies. (Watch Video) The total market size of taxi business in India is estimated at around $13 billion (Rs 78,000 crore at $1=60 rupees) and the organised sector accounts for just 5 per cent (nearly Rs 4,000 crore) of the total pie. That means companies such as Ola and Meru have huge growth potential. According to Mr Pahwa, the overall taxi business is growing at 15-20 per cent, but the radio cab business is clocking about 25-35 per cent growth. "The cost of owning a car and employing a driver cost about Rs 33 per km on a monthly run of about 1200 km whereas radio taxis provide more convenience at a lower cost," he said. Attracted by the fast-growing nature of business, many other players like Taxi For Sure and Carzonrent have jumped into this sector. Even global giant Uber is bullish on India. Most companies in the sector are growing at a staggering pace. Ola Cabs' has seen its revenues jump more than 10 times over the past year. Meru Cabs has been cash-positive for the last 32 months. Drivers on Meru's platform do a business of nearly Rs 75,000 per month and taking out expenses such as maintenance, EMIs on cars, and fuel charges, they make around Rs 20,000 to Rs 25,000 per month, the company said. This results in a win-win situation for both the service provider and the driver entrepreneurs.

Radio Cab Business Set To Zoom On The Fast Lane

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NDTV Profit

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