[svsantosh]

Meru & Easy Cab Business Model

I was traveling with a SPOT Taxi driver and I love to converse with every cabby or Auto driver to get a feel for their daily challenges from their perspective. Conversation drifted to Meru/Easy Cabs who are the only authorized Cabbies per the New Airport's of India. (Karnataka taxi's are operated by KSTDC and is a part of the authorized list to appease the Govt and Public).

What I write below is what I heard from him and not my views. Since the taxi driver was a well educated, ~60 aged driver, and was working in MICO Bosch before retiring, I hope he wasnt lying.

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Meru:

• The Prospect driver has to pay ~10K (not sure about the amount) as a refundable deposit.
• He will be put thru a series of medical tests.
• He will then be given a MERU car to drive around.
• The car's RC book will be in MERU's name.
• The driver will then drive around the city for passengers.
• The driver has to PAY MERU A DAILY FEES OF 950INR.
• Whatever the Driver earns out of Taxi meter charges BELONG TO HIS POCKET.
• If the Driver can EARN 1500Rs as daily revenue, then 1500-950=550Rs is HIS PROFIT/TAKE HOME for the day.
• Oil service, dents and dinks are taken PAID BY MERU.
• There are no Scheduled leaves for the Driver.
• Irrespective of the Health, family occasions, un-fortunate events, the DRIVER HAS TO PAY 950INR Per Day.
• 3,50,400INR will be paid/recovered in 1 year alone. Would a Logan/Esteem/Indigo Taxi be even worth that much by end of a year?
• 'Seems' M&M/Maruti/TATA & (xyz) Bank was coerced into giving all these cabs's for a very throwaway loan deal after showcasing the prospect of THE AUTHORIZED CABBY OF 'n' AIRPORTs.
• 'Seems' repayments are not that healthy and so are the maintenance bills for AMC with Manufacturers.

EasyCabs:

• Driver HAS to pay 50K refundable deposit.
• He ENTERS INTO a SIGNED AGREEMENT with EasyCabs for a 4-Year TERM.
• AGT Reads - After a period of 4yrs the DRIVER GETS TO OWN THE Car.
• Just like above - Driver NEEDS TO PAY ~950Rs Daily to EasyCabs.
• Just like above - revenue MINUS 950 = his take home daily.
• HERE - All Oil service, maintenance costs BORNE BY DRIVER. (Remember the 'deemed' owner clause after 4 years)
• If the driver QUITS/DIES!! within the 4 years - the 50K deposit is LOST and CAR GOES BACK TO EasyCabs.

Analysis/Observations/further points:

• Of the above, only the 950INR daily May slightly be wrong info per my cabby buddy.
• Still there has to be some truth in the smoke.
• Adds up to the reason why MERU's/EasyCabs are fast becoming the NEMESIS on our Roads (revenue - 950 = profit!!)
• 'seems' the business model was pitched to drivers with a prospect of @ Least 2/3 Airport TO City transfers. This will ensure @ least 750-1000Rs 'Profit' a day.
• Of the 1000+ (Such) Taxi's in a city, how many do you think get 1-2-3 such transfers.
• Have you seen the amount of taxi's parked outside each of bangy's and hyd' airport from the Sky. Looks like a Car Export Dock in Chennai Harbour... 100's of them parked!!
• This of course has 'seemed' to start a very old trend in our planet - BRIBE. These drivers have found a way to bribe the 'Phone Agents' from as low as 5,000 INR to ensure their cab tops the FOR HIRE List. Well of course...
• These guys have NO HOLIDAYS - 950 has to paid every DAY!
• This is no less then the "Fast & Furious" race to pick a Cigar from the Ferrari!!!

End Note:

• THIS is only a FOR YOUR INFO thread and has no INTENT TO Become a 'thrashing' thread.
• Well, if anyone wants to contradict me, please stop by a Meru driver who has parked roadside and pick up a conversation.
• These guys are also humans and will love to talk.
• Instead of cursing their drifting skills, I WILL DO MY PART, by tipping them a additional 25-50Rs for a 500+ bill. After all, they dont have a FAT pay check anyways, remember anything less than $5.00 in the USA is considered bad on the customer.
• There is a 10Rs/KM taxi service using Maruti 800 LPG cars. Its FAST PICKING UP, over the 15Rs/KM Meru Model. Not sure of its terms with drivers though.

Appendix:

1) Media Centre - MERU: V-LINK LAUNCHES WORLD-CLASS TAXI SERVICE

The above has history of Meru. Of course no mention of the above business #s.

2) AyaanBayaan (AB) News MERU CABS HIRING 2350 DRIVERS ACROSS CITIES

Well, more of a gyan + Advertisement page.

3) Call Taxi India at VentureWoods - India's leading venture capital community

well, a mumbaikar did a-la me. Looks like back in 2008 business was booming, in Mumbai at least. May be in Mumbai, it still is Booming business. But, hey, competition catches up. Recession DID HIT. Then what?

4) http://www.team-bhp.com/forum/street...-meru-cab.html

The above link TBHP thread is feedback on the quality of service. I Intend to keep their business model separate. Please try NOT to merge the two, since the intents are Different.

[achinthg]

The information provided is correct. I have talked to both Meru and EasyCab drivers and they need to pay Rs.950 per day!!!

[black12rr]

950 per day , even on sundays and festivals ? . Thats little too much .
What happens when there is heavy floods and curfew ?

[FlyingSpur]

This is quite an interesting thread, given that I've always wondered about how this business functions. Thanks for putting in the effort to create this thread and bringing forward the info in a clear and systematic manner.

[condor]

So is this the reason why these cabbies are open to bargaining fares ?

Till now, I always thought that these cabbies who bargain & hence dont use the meter, were cheating the cab company. If the above is true, then my presumption was wrong.

[tsk13]

Santosh, wonderful piece of information. Hope we've an insight into working of other players as well.

[ajmat]

This is true. TO make things easier, they should allow the cab to be driven by other certified drivers. i.e, I lease for Rs 950 and work for 8-9 hours and let someone else also take on another shift.

One driver, I spoke to said that his wife thinks he is cheating on her since he needs only comes home from 10am till 1. Lucrative timings are from 5pm till 10am when people are coming from the airport.

Think poor sleep patterns and driver fatigue leading to accidents

[1100D]

When you call the call center, do they ask around if they have any available cars going in the direction you want to go? We have ORIX's "Kolkata Cabs" in Kolkata, and everytime, its the same story.

While the normal cabs simply refuse to go to some destinations that do not look promising to them, for the radio taxi the standard response is that all our cabs are busy, or are not available near your pickup point (obviously the setup thing between the cab drivers and the call center is at work here), it doesn't matter if you are able to see an absolutely vacant cab in front of you, and you bargain a bit with the cabbie and he takes you to the destination.

One of the biggest grouse for cabs in Kolkata is refusal to go a destination, it remains even with the radio taxi, only the explanation is given with a velvety feel.

[lancer_rit]

Originally Posted by ajmat

This is true. TO make things easier, they should allow the cab to be driven by other certified drivers. i.e, I lease for Rs 950 and work for 8-9 hours and let someone else also take on another shift.

One driver, I spoke to said that his wife thinks he is cheating on her since he needs only comes home from 10am till 1. Lucrative timings are from 5pm till 10am when people are coming from the airport.

Think poor sleep patterns and driver fatigue leading to accidents

The rental varies by the type of car leased. Also, Meru and Easy did use to charge different amounts, atleast in delhi - not sure now. The driver does own the car in Easycabs after 4 years.
"Daily Receipts - 950/Daily charge" is not equal to earning. svsantosh forgot fuel costs. Having talked to many Meru/Easy cab guys (usually while going to/from airport), they need to make atleast 3 trips to earn something reasonable. 2 trips (1400-1500) just breaks even.

The load is also varying depending on day of week and time. Some days of the week are quite lean, other days are hectic. Most of the drivers sleep in their car when they don't have a pickup, and I have heard that some go home only in once in 3-4 days :-( On the busy days, they maybe working 24-36 hours with not any significant sleep. Most Meru/Easy cabs in Bangalore do > 100000km a year. It's a tough life ...

[anekho]

excellent information - this explains why they are always in a hurry. No vacation at all sounds very harsh, I mean they are just like us wouldn't they want to spend time with their families?

I've also spoken to several drivers and many drive for up to 24hrs to 'break even' and then earn some for themselves.

Guys, whenever possible leave a tip, it may go a long way.

[Sudan_NFS]

Good piece of Information and to add more its the same thing for all the cabbies even BPO. I am not sure of the 950 rs daily .One thing is common they don't sleep well or take rest.

[NetfreakBombay]

Originally Posted by ajmat

This is true. TO make things easier, they should allow the cab to be driven by other certified drivers. i.e, I lease for Rs 950 and work for 8-9 hours and let someone else also take on another shift.

There was an issue in Mumbai related to this. Apparently, only those who have "valid" taxt permit can drive mery cabs. So taxi drivers can sell old premier padmini taxi for 15k and use that to join Meru cab.

Because of this they can't share the car.


And when Esteem was getting phased out, Maru got a large lot at a cheap price form maruti.

it also made a bulk deal with M&M for unsold stocks of Logan.

[arunmur]

This is bad. Here i was thinking atleast now there is some cab thats decent in fare and quality. But this only seems worst than Auto's

From the charges on the car it looks like they charge about 2.5L every year from the cabbie. In four years its 10L.

So you pay 10L for a 6.5L logan.

And if I am not wrong CV's loans are at 3.5% p.a.

And when Meru buys this car in a mass deal its a bit cheaper too.

Which means they yearn close to 3.5-4L in total over 4 years of the car.

It sounds kind a ok from a business perspective but I guess they should have some implications to the driver too.

> They should be able to guarantee atleast 3-4 calls a day.
> Cabies should have an leave option. I think asking any one to work more than 40 hrs a week violates our labour laws.
> They should consider the kind of risk the job is.

Any idea what agreement is signed between the driver and the company?

[cruiser_1982]

Wow!!! an interesting read. I never thought such a business model exist. May be a slightly OT here, but do the Call Taxis in Chennai follow the same model? These guys seem to use GPS and always send the nearest cab. May be the Meru cabs in Bangalore and Hyderabad serve mostly airport passengers, as the airport is far off from the city.

[Zappo]

There is another piece of Info that Santhosh can add to his encyclopedia on the business model of Meru cabs. Of late the number of these cabs has gone beyond being sensible in most big cities. Cabbies started complaining that they are not getting enough fare through the call center route. So now Meru has made it a little more flexible. They now allow cabbies to get cozy with their patrons. And it is not necessary for them to take the call center route any more. Essentially fend for yourself is the key now.

I know this as my closest friend has a fixed Meru cab for all his journeys. It is a Marina cab. The first time was when he was going to coimby on some work and he booked for a cab through Meru. This guy came to pick him up. He chatted with my friend and provided him his cell number. He requested him to call him any time of the day or night that he may need a cab. My friend confirmed from Meru whether this is legal and has any potential problems. They said it is now indeed allowed and the cabbie is still required to inform the call center about the pickup.

Since then my friend has used this cab around 8 times and he invariably lands up at the designated place to pick him up. The best was last month when my friend went to Prague for 3 weeks. The cabby asked him where is he headed this time and also when will he return back. My friend casually told him that most probably on such and such date at around 11 pm he should be back at the Hyd airport. The guy asked him to give him a ring once he reaches back. Turns out that once my friend landed here and was still in the baggage queue the cabbie called him up to inform that he is at the airport waiting for him outside in arrivals section.