Now, traditional taxis want to expand through aggregator model

Make a U-turn soon after leading a campaign against app-based taxi aggregators

Within months of leading a campaign against web-based taxi aggregators like Uber and Ola Cabs, India’s traditional taxi operators seem to have developed a more favourable view of the aggregator model. Looking to base future expansion on this model, these operators are seeking clarifications on the fine print from the transport authorities.

The taxi operators Business Standard spoke to admitted the aggregator model was a more “efficient” one, and said it was also legal after the Delhi government recently amended the regulations governing radio taxis to include aggregators.

Companies like Mega Cabs and Easy Cabs are now looking at a hybrid model, under which they will continue to operate their existing fleets, which are owned by them, but rely on the aggregator model for further expansion. “We are seeking an appointment with the transport commissioner to understand how traditional taxi companies will transform under changed rules,” said Kunal Lalani, president of the Radio Taxi Association of India.

Lalani, also the chief executive of Mega Cabs, said his company owned 800 cars and wanted to understand from the transport department if it could attach 200 more cars through the model.

Rajiv Vij, chief of EasyCabs, said his company was also looking at the aggregator model for future expansion. “This model allows drivers to become entrepreneurs and helps taxi companies scale up faster.” Compared with the traditional taxi model, the aggregator model is more asset-light, as the companies do not have to worry about keeping the whereabouts of a large number of cars. The issues and cost of wear & tear and maintenance are also dealt with by drivers, who own the cars and are not on a company’s rolls. The car company gets only a commission on each ride, for providing its technology and platform to help drivers get business.

The traditional taxi operators’ U-turn seems to have been prompted by the fact that those like of Uber, TaxiForSure and Ola Cabs have eaten into their business, with a very rapid expansion in operations, made possible by the aggregator model.

Vij said though the rules had clearly defined the way forward, some specific issues needed to be checked with the authorities. These might include the confusion over whether the companies with radio taxi licences need to apply for separate aggregator licences. Vij also said the transport authorities seemed to have assumed all taxi operators were app-based, as some of the requirements could only be delivered through mobile applications. According to the new rules, all taxis need to have LCD panels inside to show the travel route to passengers. While app-based firms can easily implement this, non-app-based ones will have to incur additional cost to upgrade their fleet.

CHANGING TACK

• Companies such as Mega Cabs and Easy Cabs are looking at a hybrid model
• Under the model, these will continue to operate existing fleets, owned by the company, but rely on the aggregator model for expansion
• The aggregator model allows drivers to become entrepreneurs and helps taxi companies scale up
• It is more asset-light, as the companies do not have to worry about keeping the whereabouts of a large number of car
• The issues and cost of wear & tear and maintenance are also dealt with by drivers, who own the cars and are not on a company’s rolls