Taxi Market in India- Challenges & Opportunities (Association of Radio Taxi - India)
Market Overview
The taxi market in India is estimated at $9 billion and only 5-6% is organised
Evolution Of Organised Taxi Industry Radio Taxi Approved Scheme • state transport authority launched Radio Taxi Scheme in 2006 across all major metro • companies completely followed the guidelines and owned the fleet • allocated cars to drivers on daily subscriptions. • model facilitated rapid expansion, it also came at a huge cost. •
bookings were mainly done via telephone calls and cash was the dominant model.
Aggregation Model • In 2010 companies like TaxiForSure and Ola started the aggregation model. • this model was not in line with the radio taxi scheme • small fleet owners or single car owners were aggregated in this model.
• Huge investment flown in this space. • Low pricing and heavy discount offered to customer to fuel in the growth • Huge Incentive given to keep the supply to meet-up the demand
Growth & Challenges Growth Drivers • Shortage of public transport
• Demography and favorable economic outlook • Rising disposable income • Investment from global funds
Challenges • Lack of skilled driver • Clarity on regularity compliance
• Highly fragmented Industry • Individual taxis are associated with multiple aggregator with limited control
Way forward While the aggregation model has seen a rapid growth in last few years but sustainable growth of Taxi Industry in next few years would require addressing the following challenges.
• Clarity on Regularity Compliance • Decision on Usage on CNG Vehicle • Competition Commission - on discounted pricing • Sustainable Business Model
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