Meru to use 'reverse surge', bots to capture lost market

During the odd-even experiment in Delhi, Meru said it saw a 35% increase in bookings

After Ola and Uber were formally banned in Karnataka, with the state government saying they need to get a licence before plying on the roads, another taxi aggregator, Meru, is trying to get back lost volume by introducing the ‘reverse surge’ concept.

Siddhartha Pahwa, chief executive of Meru Cabs, said the company had started getting back some of its lost customers after surge pricing started to pinch the aggregator user base. During the odd-even experiment in Delhi, Meru said it saw a 35 per cent increase in bookings.

After Bengaluru, and soon Mumbai, set to ban surge, Meru expects to rake in the moolah; to capture some of the demand, the company will be using ‘reverse surge’.

“In non-peak hours, we will offer a 25 per cent discount on both our variants,” said Pahwa. During peak hours, the company will charge the full Rs 20 and Rs 16 per km. Pahwa has been very vocal against the concept of surge pricing and demanded that it be abolished. “We are in a market that is still maturing and there are not too many modes of transport. Where public transport is broken, surge puts too much pressure on the customers,” he said. He argued there was a possibility that the algorithm could be modified to show non-availability of cars and that could tilt the scales. “They, then, have a monopoly, which is not healthy,” he said.

The aggregators, however, say that they use surge pricing to earn back some of the cash that subsidised rides burn through the day. Pahwa, ironically, will use the same concept.

Meru has also tied up with Facebook to help it increase the number of bookings. “Facebook bots will help us build back our market share,” he said. Customers, he said, will need to find Meru on the messenger and then chat with it to book a cab. “I believe that soon we will have just 10 apps on a phone. And, chat messengers and bots will be the way forward,” he added.

“Our full fare during peak hours will pay for the discounts during other parts of the day,” he said. The difference, he said, would be that Meru operates on a fixed minimum fare principal while Uber and Ola could change that as and when demands would increase. He argued that the two companies should be regulated and a fixed fare band be established.

That, however, means that customers will always consider Meru as a back-up plan. Pahwa believes that is about to change as well. “The numbers of drivers will drop once incentives stop. This will last just two more years.”

One of the reasons attributed to the rise in Ola and Uber’s popularity was that Meru’s drivers would cancel at the last moment. Pahwa said he knew that was one of the reasons customers shifted away but said it had been mended by introducing an Uber-style driver-rating system. “Anyone under three stars over the last 10 rides is fined, suspended and then removed,” he said. He also attributed those cancellations to having a monopoly of sorts.

“The drivers saw demand pouring in and not enough supply. Now, that isn’t so. Their behaviour towards booking has also changed,” he said.