Taxiforsure (TFS) is a taxi aggregator and provides taxi hailing service to customers in different cities in India. The fundamental difference in approach for Taxiforsure vs it competitors Olacabs and Uber is that TFS focuses on aggregating fleet operators vs individual drivers by other companies. As per Raghu, Co-founder TaxiForSure the fleet operators own 60-70% of total taxis within tier 1 cities in India and 80-90% of total taxis within tier 2 cities. Overall, there are more than 1.1 million taxis in India.
TFS charges 10% of the trip value as a commission rate, and operators typically pay TFS money at the beginning of every month in advance, which makes the working capital negative for the business. The commission rates charged by Olacabs and Uber are in the 15-20% range. TFS has a total of 20k cabs within 46 cities in India vs OLA’ s 24k cabs within 64 cities. Uber has 2k cabs. TFS works with 434 operators, so far, and none of the operators account for more than 10% of the total rides in any city. On average, TFS does 60k rides per day (implies 3-4 trips per cab per day). As per Raghu, the global comparables are 35 trips per day in New York, 25 trips in Beijing.
Technology Powering TaxiForSure
Currently, the traffic is distributed as follows: website 5%, mobile app 70% and call center 25%. Generally, if a customer comes through the call center channel, he does 3-4 rides per year only, but this rises to as high as 6-7 times if he comes through web and 18-20 times if he comes through the app. So the repeat purchase behavior is significantly better in mobile app.
TaxiForSure Customer Profile
The typical consumer profile bookings cabs is 53% males, 47% females, within the age group of 25-30 years, largely corporate employees (70-80%), with income levels of Rs5 lakh and above p.a. Customer acquisition is 40% through word of mouth, 30% through direct channel and another 30% through paid channels. Currently, it incurs Rs100 to acquire a customer. As per this calculation, the customer has to make an average of 3.3 trips per year for TFS to break even.
TaxiForSure CAPEX
TFS is making investments in the form of subsidies per ride to the drivers in order to change mentality and drive a higher number of rides per cab per day. The subsidy amount has already come down from Rs150 to Rs75 per trip per cab. TFS is currently growing at 70% on a month-on-month basis, and this is despite reducing driver subsidy.
While Olacabs and Uber may try to aggregate fleet operators, it could be a challenge for them as there is an inherent conflict of interest, and fleet operators may not want to expose drivers to an individual drivers model.