JCB India wants to do an Uber in equipment renting space

JCB India, the local unit of British construction equipment maker, has begun to look at replicating the cab-hailing model pioneered by Uber and Ola, that allows customers to hire equipment over a smartphone app and enables owners to improve returns on these capital-intensive platforms.

JCB, which leads the market for backhoe loaders, has a smartphone app that allows users to rent out equipment from owners. The firm has over 60,000 machines, which include excavators, compactors and loaders for both construction and other industries, in use across the country.

“It is early days,” said Vipin Sondhi, managing director and CEO for JCB  India, in an interview, adding the firm was yet to market the concept to its customers. “Most of the equipment owners already own at least small cars. They will look at similar experience in construction equipment. That will happen.”

JCB has already begun preparing ground for this disruption through its digitisation journey of livelink -- an internet of things platform built jointly by Wipro and Pricol, connecting every vehicle sold in the country. This has been designed for the local market, said Sondhi.

The equipment is connected in real time with JCB's offices, and dealers can, through a dashboard, look at location, usage pattern and fuel consumption, besides potential service issues. This helps them plan stocking of spares and service the equipment.

The owners and operators also get alerted through SMS in the local language, which allows them flexibility to assign the machine based on user needs.

JCB is not the only organisation that is looking at the Uber model to use equipment and vehicles efficiently. Karnataka and Madhya Pradesh have experimented with similar models for agricultural equipment, such as tractors for farmers. They have also seen some degree of success in the experiment. JCB's biggest advantage of digitisation has been its ability to look at the utilisation of equipment and project demand for products and services it offers. “We also know which areas and which state where the machine utilisation is static and where it is decreasing. We can take an appropriate action to each of these areas," said Sondhi.

At the same time, it also helps engage better with customers in India, which is witnessing increased competition from global players eyeing a pie in the infrastructure sector. 

"Everyone will look at digitisation as they engage with customers," he said.

In the last 10 years, the construction equipment industry grew at a CAGR of 7 per cent, despite several disruptions like demonetisation and the GST roll-out.