• StartUps

Traffic woes in India, especially in the crowded metros of the country, continue to be a horror story for the most part. But there are a number of successful entrepreneurial stories emerging from the chaos that plagues city roads. Young people with foresight have tapped into the market where many people today prefer the comfort of radio taxis or home pick-ups of auto rickshaws.

Radio Tuk Tuk: Gurgaon
Started a year ago, Radio Tuk Tuk is a radio auto rickshaw service in Gurgaon that was started by 26-year-old Sulabh Mehra, who earlier worked in the IT sector. Having consistently heard of his friends’ experiences with poor public transport connectivity, he invested money borrowed from his family members to set up the radio auto rickshaw service.
With a total investment of Rs.1.2 crore till date, Mehra began the company with 50 radio autos and the company now owns and operates 90 auto rickshaws in the area. “The bank had its doubts in the business idea before giving us the loan,” said Mehra. However the company is now in an expansion mode. “Most of the investments in setting up a call center etc. have been made and we are now looking at operating about 500 auto rickshaws in the coming year or two,” he said.
While no venture capital funds have come their way yet, Mehra says that there has been some interest from institutional investors, which he will tap once he begins to expand at a faster pace.
From his experience ,Mehra says that obtaining licenses and the passenger carrier permits from the administration was a smooth process. His biggest challenge lay elsewhere: Organizing the auto rickshaw drivers to provide quality service. Most drivers were not adequately educated or literate, so they failed to understand the functioning of the GPS systems and other technology installations that had been made in the auto rickshaws.
Most of the drivers are migrant workers, says Mehra, and are not available for work throughout the year. Strikes have also been regular.
While the service has generated some employment in the area and has been a relief for many residents of Gurgaon and for those who travel to Gurgaon for work, Mehra says that “it hasn’t been a cakewalk, and on some days it does feel like I was better off sitting in an MNC office.”

Ecocabs: Punjab
Ecocabs was started by in 2008 by IIT graduate Navdeep Asija, who is also an advisor to the Punjab government on public transport now, and Dr. Bhupinder Singh, a graduate from IIT Roorkee. The duo started out in their hometown Fazilka in Punjab, as a social organization. The organization now provides a dial-a-cycle rickshaw service in various cities of Punjab.
The organization was begun with 20 cycle rickshaws; the number has swelled to 500 cycle rickshaws today. The organization is not-for-profit, though Asija says that the model is such that it could be a profitable business venture if an entrepreneur so plans it. The money that Ecocabs makes goes into a bank that the rickshaw pullers benefit from.
The organization now operates in major cities of Punjab like Amritsar, Patiala and 18 others.
The money invested in starting the venture (Rs.2 lakh) came from the savings of the founders. Their expenses have mostly been incurred in training the rickshaw pullers and in providing them with mobile phone connections. The call centers are mostly local tea stalls which can be located via GPS. The organization now has an android application to help locate the closest call center. The organization also invested in a different design for the rickshaws. This has helped reduce the cost of the cycle rickshaws, making it easier for the rickshaw pullers to buy these.
“The biggest challenge in running such a show in Punjab is that someone who is not well-connected tends to get involved in issues with the police or faces opposition from local politicians. Politicians control segments like bus services privately, and do not want to cede opportunities to entrepreneurs,” says Asija.
However, the rickshaw service has been a tool to help improve tourism in the area, he adds. Most people are pleasantly surprised with the etiquette displayed by the rickshaw pullers, something the startup has trained them in.

Rickshawale: Mumbai
After quitting his job as the business head at Reliance Logistics in 2009, Hemant Jain decided to begin his own business. That kicked off in October this year with Rickshawale, a dial-an-auto rickshaw service in Mumbai.
The only thing Jain did was create an efficient system to organize existing auto rickshaw operators. Instead of buying auto rickshaws for the company, Jain went out to convince the drivers to become members of Rickshawale.
After three months of extensive efforts, he began with 300 members. The drivers own the rickshaws but Jain has installed a tracking system and set up a call center to help organize the availability of the rickshaws.
Customers call to be picked up from a certain address and for a nominal fee, the closest-located auto rickshaw driver is sent to the address. To cut costs of the technology installment in the autos, Jain used a GPRS-based system which was cheaper than installing GPS devices in the autos. He personally trained the rickshaw drivers on how to interact with customers and provide a reliable service. He avoided the hassle of taking a permit by not buying the vehicles.
“The problem with providing most public transport services is that it tends to be a very capital intensive business and often has high operational costs,” explains Jain. He has so far invested Rs.70 lakh in the business. “What keeps me going while operating in the public transport sector is the satisfaction I get out of serving people,” he adds.
The company plans to expand its operations into the taxi space as well this month. While some venture capitalists have shown interest in his business idea, he doesn’t need the funds just yet, says Jain.

Tags:
Ecocabs, public transport, Radio Tuk Tuk, Rickshawale