Taxi transportation system in India has long been characterized by paucity of well-maintained vehicles, tampered meters and unruly behavior of drivers. The need for a hassle-free and smooth ride has long been on the anvil for the Indian transport authority. Though Government did not harp on the same tune, but private operators could fathom the potential lying with a new and improved means of communication through radio cabs. Demand for radio cabs have been soaring in the metros and large cities as MNC executives, tourists, IT sector executives as also affluent Indians opt for a faster and smoother means of transportation through well maintained radio cabs. Today, radio cabs capitalize on its comfort quotient and availability quotient to attract people even though fares are comparatively higher than normal cabs.
The report begins with an introduction section which throws some light on the concept of radio cabs. It speaks about the difference between radio cabs and ordinary cabs as well as deliberates on the growth potential of radio cabs in future across India. A brief flowchart in the functional framework is also shown. It then moves towards a description of the Indian radio cab market stating its market size and growth. The next part throws some light on the business model adopted by the operators in the country along with examples. This is immediately followed by the revenue model wherein the components making up the revenues earned are discussed in detail. The section gets concluded with a Porter’s Five Forces Analysis for the sector.
Brief descriptions of the drivers that help the sector to prosper include increase in disposable income and transportation spending, influx of tourists, demand from corporate sector and change in mindset. Fares of radio cabs are more than ordinary cabs which term them under the category of luxury services. For any kind of luxury item of consumption, MAD (Money, Authority and Desire) is required. Though desire gets registered matter-of-factly, money and authority constitute the primary ingredients that drive demand. Increase in disposable income translates into heightened spending power at the hands of people, thereby acting as a potential driver for radio cabs’ sector. Another factor that has led to the growth of radio cabs is that of influx of tourists. Tourists travel to unknown lands where they are not well conversant with the place. In a country where cabs have earned a name of cheats and tricksters, radio cabs cater to the security and safety aspects. Places like airports or railway stations are more populated by radio cabs since they register a high percentage of footfalls. Radio cabs derive succor from increasing number of tourists, inclusive of FTAs, who generally ask for such mode of transport owing to its ease of booking, accurate meters and quality service.
A significant stimulant in this market constitutes the demand from the corporate sector especially that of IT and BPO sector. A common factor in this regard is its varied shift timing for its employees. Companies who have the flexible timing plan hire radio cabs to commute their employees through ‘Pick up and drop’ system. As India continue to witness stupendous growth in this sector, its logistics support gets translated into demand for radio cabs as a part of their employee benefits scheme. It should also be noted that even employees, who do not fall under the purview of such schemes, look at booking radio cabs for its comfort as well as availability. Finally, everything that gives momentum to an initiative is the primary outlook of the people. Today a particular product gets successful only after it gets accepted by the common man. For accepting a new product like radio cab which is available only at higher price, it has to be accepted by them. This in turn stems form the evolution of the mindset wherein people are ready to spend more in lieu of better services and comfort. A change in mindset acts as the root cause behind the success of radio cabs and will continue to do so in future. While these factors can be termed as growth drivers, there are certain aspects that act as hindrances to the sector namely high fares, TRAI regulation on SMS caps and unavailability of parking space.
The next section speaks about the Government participation in the sector which caters to providing brief deliberations on the policies in different cities across the country.
The major trends identified in the sector include hard and soft skills’ training for cab drivers, increasing entertainment options inside radio cabs, radio cabs with Wi-Fi service, collaborations with other service providers marking the sector, PE investments in the sector, technological advancements in radio cabs and exclusive radio cabs for women.
The competition section offers a competitive landscape of the players by providing their financials and key financial ratios. It also provides basic information regarding the organizations. Key financial parameters constitute the financial performances of the players which are followed by business highlights.
The report concludes with a section on strategic recommendations which comprises an analysis of the growth strategies of the online advertising market in India. An initiative towards introducing in-cab card payment or parking near point of more footfalls like discotheque or shopping malls can help in bolstering the market further.