Ola Cabs, one of the fastest growing startups in the Indian Internet and consumer space has sparked a new market opportunity . You might have met the man behind Ola Cabs at Startup Saturday Mumbai, if not, Headstart caught up with Bhavish Agarwal (Co-Founder & CEO, Ola Cabs) to talk about Starting up and the journey with Ola Cabs so far.
Please tell us something about yourself and what you did before Olacabs
I graduated from IIT Bombay (IIT-B) with an engineering degree in computer science and worked with the Microsoft Research India for a couple of years However, I always wanted to start something of my own and this made me look at alternatives. Having been a consumer of cab services, and not always a happy one at that, I had always thought about how with a little thought it was possible to considerably enhance customer experience. I also realised, given my technology background, that these pain points could be addressed using technology. Soon I came up with the idea for Olacabs and started up in December 2010 along with Ankit Bhati, a fellow alumnus from IIT-B.
What is the vision behind Olacabs? What pain point are you addressing?
The vision behind Olacabs is to provide hassle-free, reliable and technology-efficient car rental service to Indians. In a deeply fragmented and highly unpredictable market of car/taxi services, there is a significant shortage of easy and comfortable on-ground options for transportation, be it within a city or outside. Also, the inventory utilisation among small cab operators (ownership of 2-5 cabs) in India is an abysmal 40-50%. Cab owners benefit from the Ola Cabs network and technology platform and that in turn helps them procure customers and enhance their income through better inventory utilisation. In Mumbai, inventory utilisation levels have gone up to 70% for cars that are on the Olacabs platform. Olacabs provides convenient, transparent and quick cab services, both car rental and point-to-point, by leveraging technology to provide a uniform and highly customer-centric experience.
Being an aggregator, how are you planning to improve taxi experience by not providing it yourself but by depending on the same unreliable taxi operators?
We are India’s first online aggregator of car rental services. We integrate car transportation, be it point-to-point services within a city, hour-based rental services or outstation travel, onto a technology platform, ensuring convenient, transparent and quick service fulfillment for the customer. Not having our own fleet actually works to our advantage. We only select cars which meet our defined standards to be a part of our fleet. We also conduct regular service audits, train and certify drivers and do thorough background checks of both operators and drivers before partnering with them. Customers can access us, on the web, through a mobile app or through a customer service centre. Our customers vouch for the superior experience they have had.
How do you put technology to use for scalability?
Our aim is to use technology to bring efficiency and superior customer experience (in par with the hospitality industry) to the car rental industry. We endeavour to bring convenience, price transparency and standardization to consumers booking car rentals and cab services. There is also a freely downloadable mobile app using which customers can book cabs and monitor their position by the built-in GPS system. We have a dedicated customer care centre to address all queries of our customers. Technology has enabled us to adhere to the 10 minute service level agreement (SLA) which we provide to all our customers.
We also use ‘heat maps’ to efficiently manage the demand and supply of cabs in various parts of a city at different points in time. The traffic alerts using information from various sources including social media help in guiding the drivers to reach the destination in the shortest possible time. Both these help in effective inventory management for Olacabs. We plan to scale quickly as we have an asset-light and technology-focused business model. Also, with the capital raised from Tiger Global, we plan to significantly ramp up our technology infrastructure.
What were the major hurdles you faced in securing funding from Tiger Global or others for that matter?
The challenge was to convince Tiger Global and other investors about the robustness of our business model and the fact that Olacabs is here to stay (and scale), in a market that is highly fragmented and has a few players providing similar services. However, Tiger saw the value in partnering with us and we are thankful to them as well as our angel investors who showed faith in us.
How has the response been so far? Can you cite some statistics as well? Do you see Olacabs going pan-India in the next couple of years?
The response so far has been great. There are customers who use us multiple times for point-to-point services, in a day. We intend to bring all car operators and taxis pan-India on to a single technology platform to enable real time inventory distribution. Currently, Olacabs operates over 700 cabs in Mumbai with a view of expanding its services to ten Indian cities in a year’s time. We will enter New Delhi and Bangalore shortly. We will be present in 10 cities and have 8,000 bookings per day, by the end of the year. In each city we will build operational teams that will take care of the ‘local thinking’ and local implementation.
Any word of advice for our readers and budding entrepreneurs?
All I would say is that today India presents innumerable opportunities to make a difference as an entrepreneur and to participate actively in the India growth story. So, just follow your passion. But at the same time, be objective and learn from your failures, as you take risks. It also helps to have a co-founder with complimentary skill sets.