Overview of the presentation

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| rrent Facts
R
ic Transport in India

 @


 Buses take up over 90% of public transport in Indian cities
 Services are mostly run by state government owned transport
corporations
 New initiatives like Bus Rapid Transit (BRT) systems and air
conditioned buses have been taken by the various state
government to improve the bus public transport systems
R
ic Transport in India

 u

 The rail network traverses through the length and breadth of
the country, covering 6,909 stations over a total route length
of around 63,465 km
 Transporting over 18 million passengers and more than 2
million tonnes of freight daily
 The Mumbai Suburban Railway which began services in
Mumbai in 1867, transports 6.3 million passengers daily and
has the highest passenger density in the world
R
ic Transport in India

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 |haracterised by a small cabin for the driver in the front and a

seat for passengers in the rear

 There are total 2,46,458 auto rickshaws in Mumbai as of 2008

R
ic Transport in India

 ! 

 Rrivate vehicles account for 30% of the total transport
demand in urban areas of India
 The number of automobiles produced in India rose from 63
lakh (6.3 million) in 2002-03 to 1.1 crore (11.2 million) in
2008-09
 India still has a very low rate of car ownership
 Low price cars introduced
R
ic Transport in India

  
 
 In India, most taxicabs, especially those in Delhi and Mumbai,
have distinctive black and yellow color.
 Taxis and all other commercial vehicles have a yellow number
plate so charging taxes and toll in highways is easier for the
officials.
 Taxicabs in India are mostly Rremier Radmini or Hindustan
Ambassador cars but newer ones are mostly Tata Indigo
/Maruti Alto
@ackgro nd of M 
ai traffic

 Mumbai has a population of 1.9 million. 88% of commuters in

Mumbai use public transport mainly suburban trains as a
means of transport
 The public transport is overcrowded and does not offer point
to point service
 Most of Mumbai͛s arterial roads are congested
 Improvement has been taking place in the train and bus
systems through public investment
 But very little attention has been paid towards improving the
intermediate modes i.e. the taxis
 ˜ isting scenario of ta is in
M 
ai

 5% of the commuters in Mumbai use taxis

 About 55,000 taxis ply on Mumbai roads
 There are 54,524 taxi permits
 2,32,002 drivers hold Taxi Driver͛s Badge (Billa) which
authorizes them to drive a taxi
 Issue of new permits has been frozen since November 1997
 Ta is in M 
ai

 The black and yellow Fiat taxis in Mumbai, are integral part of
the city's heritage
 Radio cab services have been introduced
 These taxis are brand new, air-conditioned cars, fitted with
GRS and electronic meters
 Rresently operated mainly by three companies: Meru (Green
Silver), Gold cabs (Yellow Red) and Mega cabs (Black)
ow radio ca
s operate?
 The radio cab business operates on a unique
business model
 This cabs are provided with GRS, MDT system
 When a customer dials the call centre of a radio cab
from, the operator locates vehicles that are closest to
the caller and seeks the driver͛s response. Once a
driver confirms with a ͚bid͛, the vehicle͛s number is
flashed back to the customer
 Radio cab firms operate on a 24x7 basis.
ow radio ca
s operate?

 The system of franchises is making the

radio cab business more popular
 Meru in Mumbai has already got many
cabbies to transfer their licenses to the
company and operate new vehicles under a
profit-sharing scheme
Feet Manageent
rhy go the radio ca
ro te

 Radio cabs constitute just about 8% of the four lakh registered

taxis in the country. With a maximum fare difference of Rs
5/km with regular taxis, these cars that come equipped with
GRS systems offer good value for customers
 The next decade will see about 450,000 taxis and auto-
rickshaws being replaced in major Indian cities, presenting
an over US$2 billion opportunity for the radio cab business
 Increased efficiency
 The radio cab business has tremendous potential for
growth in India as the transport needs of the corporate
world and even of middle-class and affluent will be met
efficiently
 With Enormous parking problems, many residents would
prefer to call up ʹ or SMS
 @ siness ode efficiency

 Driver (subscriber) cruises around the city

 |ustomer dials the call centre of the cab firm
 Operator locates vehicle closest to caller via
GRS and seeks drivers response
 Once the driver ͚Bids͛ the vehicle number is
flashed back to the customer
 Also plan to install equipment to accept credit
or debit cards
 Threat of New ˜ntrants

 New entrants are aggressively replacing the existing

Black & Yellow cabs
 |apital Intensive Business
 State Government support-State governments are
keen to issue licenses to operators of radio cabs.
 The High court recently endorsed a move by the
state government to phase out 7,000 yellow-and-
black taxis that have been on the roads for more
than 25 years
 Blue arrow and Bangladesh based reliance cab are
prospective entrants
 Threat of s
stit tes

 Other modes of public transport like Railways

(local) , buses, Auto has always being a
substitute to the cab market
 Low cost autos are biggest substitutes
 Rersonal transport (EMI options, low price
|ars)
 Metro and Monorail
 |opetitive Rivary
 Intense competitive rivalry
 Many Rrivate players
 Technologically superior competition
 Franchisee system
 New business models being adopted fast by
competitors
 Government support to private players for
technologically superior and environment
friendly
 @argaining power of
yers

 Medium
 Rlethora of options for mode of transport
 Intense price wars between competitors
@argaining power of s ppiers

 Low
 The linkages of this business to the rest of
the automobile sector are unparalleled.
Automakers are obviously eager that radio
cab feet operators select their vehicles.
 Rower of bargaining on technological devices
 |ar Manufacturers
 EMI options on bulk purchase
 Threat of New Entrants
(HIGH)

Bargaining power of Bargaining power of

|ompetitive Rivalry
suppliers buyers
(HIGH)
(LOW) (MODERATE)

Threat of Substitutes
(MODERATE)
 ëTR˜NGTë
 Already available biggest fleet size and permits
 Reliable mode of transport
 At airports vicinity black and yellows are only allowed
thus increase efficiency and transparency
 Emotional |onnect with customers
 Effective complaint redressal procedure
 Lost & Found facility
 Fare rates
 r˜
N˜ëë
 15 year domicile role for new permit applicants
 Most cabs more than 25 years old (which were
emphasized to be phased out)
 Old cab drivers selling permits to fleet operators
 |urrent state of the taxis is shoddy
 Transparency
 Refusal of fare
 Lack of professionalism
 Not enough attention on safety and security of
customers
 ORRORTUNITY

 Easily availability of finance

 |ab-Advertising
 |ar-pooling
 Rarking Rroblems
 |hanging lifestyle, people don͛t want troubles
of driving, want more comfort
 TR˜
Të
 Government supporting private operators of
radio cabs
 Rising fuel prices
 High court endorsed move by state
government to phase out 7000 yellow and
blacks (<25 years old)
 Less interested drivers
 Improvement has been taking place in the
train and bus systems through public
investment
 ROLITI|
L & ˜conoic F
|TORë

Econo
Rolitical
mic
Large political Boom in
influence tourism

Economic
15 year
|apital of India
domicile law
- Mumbai

Disposable
Knowledge of
Income
Marathi
increased

|onsumer
Taxi fare
behaviour
decided by
changing(More
MMRTA
comfort..)
 ëocia and Technoogica Factors

Technol
Social ogical
Air Rollution,
Bharat III GRS tracking
norms

Growing |NG/Greener
population fuels

More number
of young Tamper-proof
working meters
individuals

Emphasis on
safety, comfort,
quick
accessibility
 O
ective

To develop a new business model for the yellow and

black taxis competent enough for them to fight the
private players like Meru, Mega cabs
To frame marketing strategies for them in terms of
branding, advertising, other forms of communication