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A way out of traffic jams

Traffline provides real-time traffic updates in Delhi, Mumbai and Bangalore. As it plans to extend the service to more cities, it has to figure how to monetise the user base

Neha Pandey Deoras 

Ravi Khemani,  co-founder & director of Traffline,

In May, Aaj Tak's Vikrant Gupta wrote on social networking site Twitter, "Have to say @is doing a wonderful job. I always make it a point to scan it before deciding on routes." Ashish Bali tweeted he had saved an hour, thanks to @ "Link road was the best idea. Reached Goregaon east from Dahisar in 30 minutes," he wrote.

and are Delhi and Mumbai Twitter handles of Traffline, a digital traffic information firm.


Traffline, which allows commuters to check traffic conditions in their cities at any time, was launched in 2012 through its parent firm Bird's Eye Technology, founded by and in 2011.

 
Vaghani, co-founder and chief executive, manages product and business development. Khemani takes care of finance, daily operations, project management and recruitment.

Brijraj Vaghani
Initial drags for the company included no concrete help in sourcing data, lack of capital and talent and the fact that wasn't a consumer-centric company. Vaghani says, the primary concern is "to get people used to checking traffic news before travelling". He adds the company is shifting from a premium model to an all-free one.

How it works
One can visit the website, allow it to access her/his location or feed this in and get the traffic details. One can also look around a location in a map for information along a certain route and find the estimated travel time, based on traffic conditions. Or, look for traffic jams in a city or parking space. Vaghani says the service can be accessed across platforms - email, SMS, mobile phones and a call centre.

FACT BOX
Area of business : Digital traffic information firm
Started operations: 2012 via its parent company Bird's Eye Technology in Mumbai
Revenues: Rs 2.5-3 crore (2013-14, estimated)
Break-even : In 2017
Funding: Promoters = Rs 35-40 lakh
IIM-A's Centre for Innovation, Incubation and Entrepreneurship = Rs 20 lakh
Indian Angel Network = Rs 2 crore
Matrix Partners = Undisclosed

 
serves customers in the National Capital Region, Mumbai, Thane, Navi Mumbai, Bangalore, Pune and Hyderabad. Next year, it aims to reach 10 more cities, including Chennai, Kolkata and Ahmedabad. It also plans to offer services for national highways and tier-II and -III cities.

"We don't have any competition, apart from sporadic traffic information provided by radio stations, sourced manually from limited junctions," Vaghani says.

Waze, Sabka Traffic and Happy Paths also provide traffic information but only through mobile applications.

sources data from taxis, public transport vehicles, etc, which have GPS installed. Accident and event-related information is collected from people on the field, as well as Traffline's followers on Twitter. "We track this network of probes meticulously; a patented algorithm collates the data and gives it to users," says Vaghani.

Taveesh Pandey, chief executive and director, Black Diamond PE Advisors, says, "Sourcing data from Twitter may keep expenses low and allow it to focus on service but after a point, users' expectations will soar. Using Twitter data is a short cut. To be able to take the big leap, will need investment of $3-5 million."

He feels it should focus on securing commercial clients like logistics firms or pizza chains and tie up with mobile firms to leverage their client base.

Funding needs
For Traffline, the initial capital of Rs 35-40 lakh came from the founders' personal savings and funds from other small projects. Then, it received funding from the Centre for Innovation, Incubation and Entrepreneurship, Indian Angel Network and Matrix Partners. Vaghani says the turning point was the fact that the company was selected as a finalist in the 10-day 'Power of Ideas' contest and incubation at Indian Institute of Management-Ahmedabad.

Before the funding by Matrix Partners, India Angels Network had infused Rs 2 crore in Bird's Eye.

On the current financial position, Vaghani says, "We don't need any more funds."

Vikram Vaidyanatha, director at Matrix Partners, says, "Today, the business model is unclear; we're single-mindedly focused on serving users in a unique and differentiated way and becoming part of their daily lives. In time, we will experiment and evolve a business model."

Growth curve
has grown from a four-employee entity in 2012 to 20-strong. Its mobile app has already seen 100,000 downloads since its launch early this year. Currently, it receives 3,500,000 data points a day for traffic monitoring and 1,000,000 traffic requests a week. A user base of about 500,000 is accounted for by the mobile, web and call centre media. On a month-on-month basis, this has been growing 30-40 per cent in the monsoon and 20 per cent in summer. The monthly active user base stands at 40 per cent of the total.

The company's services have been endorsed by the Mumbai, Thane, Bangalore and Pune traffic police departments.

It aims to break even in three years. For the past financial year, the revenue wasn't significant. "We clocked only a few million rupees. We are still finalising our business plan post the latest funding. So, there is no revenue target," says Vaghani. Estimates suggest the company earned revenue of Rs 2.5-3 crore last year. Revenue comes from value-added services, location-based advertising, through call centres and app purchases.

"The good part is we don't invest directly in hardware. That happens mostly through partnerships. Therefore, ours is a low-cost model. Our expense is on software development and maintenance. Of the operation costs, 10 per cent goes towards maintaining the Twitter handles and taking calls," says Vaghani. There are no marketing costs; acquires customers organically and through social media.

What gives an edge over Google Maps is it works closely with the traffic police and social media users. "We aspire to push traffic alerts to users on a real-time basis in the next two years," says Vaghani. He expects government authorities to approach for data through the next two to five years.

As the market matures, competitors are inevitable. "The key challenge for is paid-customer acquisition and keeping its accuracy better than Google's. In business-to-business markets where the company offers services to taxi and others, developing barriers to entry is equally important," says Sushanto Mitra, founder & chief executive officer, Lead Angels Network.

The company also plans to integrate its system with other sectors such as automobile, travel and telecommunication, which can use traffic information to improve their operations.


EXPERT TAKE

Rajkumar Mundel
Rajkumar Mundel
The application (app) is the same as Google Maps; all are present in Google Maps. The report section of the app is very useful, as it tells end-users about the root cause of the traffic. And, the data can be used by traffic police for rapid action. But the timeline needs a filter section for updates. Most of the time, people share their thoughts about traffic on Twitter, and such information isn't relevant.

As a revenue model, advertising will not help the company unless user-generated data cannot become advertisement. As far as value-added service is concerned, if users are generating data, all of the app should be free. No one has the time to call a support centre or call centre for

will be a scalable business if the data generated by end-users can be utilised in a more effective manner, rather than only by the auto and travel sectors, as 'Android Auto' will be launched soon. Integrating live traffic feed with industries in the auto and travel sectors is not a valid point. So, once Android Auto is available in cars, people can download the app directly and use it. The auto sector will not have to depend on

Rajkumar Mundel, is founder of Letsride.in, a community driven ride-sharing social platform

First Published: Mon, July 21 2014. 00:48 IST
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