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YatraGenie: Taxi-Aggregator Model in Danger of Collapse

Sunil Shah | June 29, 2016
Here’s a surprise: A CEO bold enough to talk about a deep flaw in the Indian taxi-aggregator business—and why it needs to be fixed quickly.

"Hand to our hearts, if any of us (taxi aggregators) say we are changing the lives of drivers, we'd be bullshitting," says Renil Komitla, President and CEO, YatraGenie.

That isn't the sort of thing you hear every day. In fact, it's the kind of thing you never hear in a market jacked up on investor money Red Bull--let alone from the CEO of a tech-transport company.

But that's just the sort of straight-shooting person Komitla is.

So just who is this man and why should you listen to him?

Here's why: Because Komitla knows the travel business. YatraGenie isn't Komitla's first brush with the transportation business. Years ago, before tech-transporters became a fad, Komitla set his mind on fixing the transportation problems of his home town, Nellore, Andhra Pradesh. In 2004, he started Komitla Bus Services to ensure that Nellore's citizens could access good quality bus services.

That's when he learnt something important: For the most part, transportation in India, isn't a sustainable business, not at current prices.  

"I started Komitla to serve the people of Nellore, to offer them decent bus services. Over the course of 12 years, I've personally put in more than Rs 4.2 crore into to keep services running," he says.

The same applies to the taxi business. And aggregators, he says, aren't making things better by lowering prices.

When the flood of investor money dries up, it's the driver ecosystem that will suffer the most, he says.

We're beginning to see signs of that. The recent protests among Uber drivers in India objecting to the aggregator's revised incentives, shows this.

But he does believe it can be fixed. Here's how.

What's the problem with the taxi business, the way it is today?

I don't know if my peers in Ola and Uber agree, but technology can only play a limited role. The operator, that's the people driving cabs, have to be in business if anyone else--including end-customers and taxi aggregators, can benefit.

Whether you're taking about Ola or Uber or YatraGenie, we can only be in business if the underlying layer, that's the people who run cabs and buses, are healthy and profitable over time.

The problems, we face today, are deep-rooted and are beyond the ability of one person or company to fix. (These problems boil down to unsustainable pricing). Let's take, for example, a ride from Koramangala to the Bangalore airport. That's about 33 km. Now, if you take a Meru cab, which charges Rs 19.5 per kilometer (after the first 4 km), you will pay about Rs 770 including taxes. - 50KM, you will pay about Rs 1200 including taxes. Taxis like Ola, Uber, YatraGenie it is about Rs 800.

 

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