Interview With Olacabs Team “Our Value Proposition is Not in Creating Marketplace, But Is In Creating Great Experience”
Olacabs is a Mumbai based startup that brings the taxi/cab services online. Olacabs was started by two IIT Bombay graduates and here is presenting an interview with the founding team on startups’ business model/future plans.
Q: Tell us about your life prior to starting Olacabs?
A: I graduated with a B.Tech in Computer Science from IIT Bombay in 2008, got a placement offer from Microsoft Research in Bangalore and joined them straight out of college. I really enjoyed my work there and worked for 2 years, researching and developing new internet technologies.
My co-founder Ankit has a Dual Degree (B.Tech + M.Tech) in Mechanical Engineering from IIT Bombay. He worked for a couple of startups (QED42, Makesense and Wilcom) before joining Olacabs.
Q: What made you start Olacabs?
A: I had been very interested in entrepreneurship from my college days and aimed to start my own company at some stage. While in Microsoft, I began actively searching for ideas to start a business. I left Microsoft and started an online company to sell short duration tours and holidays online. While running that business for a couple of months, I took a car rental from Bangalore to Bandipur and had a very bad experience. The driver stopped the car enroute, tried to renegotiate and abandoned us in the middle of the journey.
This made me realize that this was an issue many consumers faced and providing a top class rental experience was a great opportunity! We changed our business to focus on this new opportunity and Olacabs was started!
Q: What’s the business model behind Olacabs. You are creating a marketplace which is competing with a phone call (to Meru/other taxi services)?
A: Our value proposition is not in creating a marketplace but in providing a great experience to people wanting to use car rentals and cab services. Meru and other taxi operators take bookings over a phone call but they often let you down with service. Meru offers only local city taxis and even stands it’s customers up many times. Our value is in providing price transparency and a standardized experience across all types of cab requirements, be it local or outstation.
Our business model is very simple. We partner with private taxi owners, provide modern technology and processes for booking, dispatch etc. and quality assurance. Our model requires very low capital investment as we don’t buy cars. Private taxi owners also benefit by being able to access aggregated consumer demand across different services like outstation travel, local transfers and full day/half day rentals.
Q: Are you aggregating operators or rental services?
A: We are partnering with the owners of private taxis directly. There are around 4,00,000 private taxis all across India, and most of them are in the unorganized segment. Owners typically own and operate 3-5 cars. Other offline agents can also use our inventory to book cars for their customers.
Q: This is purely an offline business (to get partners online). How will you expand to other cities?
A: Offline logistics is a major component in our business. We are guaranteeing a great experience, where your cab comes on time, your driver is well mannered and dressed, there is price transparency and convenience in booking.
This involves a major effort in regularly training and auditing drivers and cars and ensuring delivery. We want to keep the experience consistent across cities and would focus on keeping the quality top class rather than expanding into every small town and stretching ourselves thin. Some aspects of our logistics like the call center and training can be scaled relatively easily across cities, while others like partnerships and delivery will have to be done specific to each city.
Q: Isn’t corporate a better target (than consumers)? Are you planning something on these lines?
A: We get consumers through both retail and corporate channels. Both see value in our proposition and we are focused in leveraging both channels.
Q: Future plans? What are the next cities planned?
A: We want to fine tune our model in Mumbai first. Once we do this, around 4-6 months from now we will be looking to expand to other Tier-1 cities like Bangalore, Delhi, Calcutta and even tier-2 cities like Pune, Jaipur etc.