Before offering
auto-rickshaw ride, TaxiForSure to launch its lowest-cost segment using Tata
Nano
BENGALURU: In a bid to
undercut competitors, TaxiForSure is set to launch its lowest-cost segment
using Tata Nano cars in Bengaluru this week, ahead of a plan to offer
auto-rickshaw services.
"Apart from being
cost-effective, Nanos are also compact cars and help get around roads
faster," said Raghunandan G, co-founder and CEO of TaxiForSure.
After a soft launch in
Bengaluru with about 200 cars, the company will expand the Nano service to
other cities. "The price will be substantially lower than our current
range," Raghu said, without divulging details.
The Bengaluru-based
company's regular fare is Rs 49 for 4 km in all the cities it serves. Cab
services such as TaxiForSure, Meru and Ola, along with taxi-hailing app Uber
are cutting fares and offering innovative services as they seek to tap demand
for affordable and reliable public transport in Indian cities.
They're also raising
funds to build and sustain their businesses in a market estimated to be worth
about $9 billion, of which only 4-6% is organised. TaxiForSure has negotiated
with Tata Motors for a bulk discount of as much as Rs 80,000 per Nano on behalf
of drivers.
A Nano costs about Rs 2.5 lakh and is the cheapest car on Indian roads. A query sent to Tata Motors did not immediately elicit a response.
A Nano costs about Rs 2.5 lakh and is the cheapest car on Indian roads. A query sent to Tata Motors did not immediately elicit a response.
"All taxi
aggregators are losing money on every trip due to high driver acquisition and
customer acquisition costs. The key purpose behind introducing low-cost
vehicles is to reduce the cost of operations," said Jaspal Singh,
cofounder of Valoriser Consultants. Meru Cabs and Ola are already present in
the low-cost sector with fares starting at Rs 10 per km. Last week, Uber
launched its hatchback segment to compete in the same range with a base fare of
Rs 40. After the launch of its Nano cabs, TaxiFor-Sure is scheduled to
start its auto-rickshaw segment in December.
"We realised that
for distances more than 10 km, our customers use us, but for less than that,
they prefer autos," Raghu said. He said the company has already set the
grounds for the launch of auto-rickshaws but will wait to first get Nanos on
the road.
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