Through mGaadi, a commuting service from India Drivers Network, Solomon Prakash and Vishy Kuruganti aim to organise auto rickshaw commuting in Bengaluru
Most of us can relate to the frustration of hailing an auto, especially in a city like Chennai or Bengaluru, where haggling over rates, charging over the meter or blunt refusal of service is an everyday challenge for a commuter. To tackle this, especially in Bengaluru, social entrepreneurs, Solomon Prakash and Vishy Kurungati, have come together to setup mGaadi, a social enterprise that aims to formalise the local transport sector by keeping in mind the needs of the driver as well as the commuter.
“From the business point of view, an auto driver who has about Rs.200 investment can actually earn around Rs. 800 to Rs. 1000 in a city like Bengaluru if he is willing to work about 10 hours. This is on a good day. I don’t know of any other business that can give such returns for such a low investment,” states Prakash. For the driver, while the company does not promise higher income for the same price, it aims to offers a stable income with no waiting time.
For the commuter, apart from the hassle-free auto availability, it also aims to ensure security and reliability in local transportation. “Certain formality needs to be introduced into the local transport sectors – taxi and autos – where people can predict what is going to happen in terms of how much they spend, how long will it take to reach the destination, when the auto will show up and the safety factor,” adds Prakash. mGaadi believes that one cannot formalise the process by penalising the drivers. Instead, it can be tackled through a combination of process and technology. “You should try and make the identity of the driver and his rating transparent to the public. That way, you’ll find a way of rewarding drivers who are good and here to stay, and be able to reject the drivers who are misusing the system. The whole purpose of India Drivers Network (IDN) is to move towards that,” states Solomon.
mGaadi is a commuting service from IDN, which builds a location-based network of commercial autorickshaw drivers based on customer ratings. The founding duo is all set to improve the quality of commuting in Indian cities and at the same time deliver a suite of livelihood and social security services to drivers.
Starting the engine
The idea struck the serial social entrepreneur, Prakash, when he was involved with construction workers. Ten years ago, he came across drivers who wanted to be a part of a network that can give them basic financial and health related access. While at that point of time, the cost of GPS devices and technology was not so accessible, today, a majority of the population owns a smart phone. Hence, the apps become easily accessible. “Besides, with prices falling constantly and higher value phones being introduced, the second hand market is also quite active. This is the right time for such a service,” says Prakash.
And, a few years ago, when he met Kuruganti, in Ashoka (Prakash is also an Ashoka fellow), an organisation that works towards societal transformation, he found a perfect business partner in him. Kuruganti, who wanted to get out of the corporate rat race, quit his job in Adobe, and spent a year blogging. His meetings with Prakash for the blog led to their friendship and together, in January 2013, they set up mGaadi.
Explaining how mGaadi works, Kuruganti says that a customer uses the app in about two or three steps. Once a customer selects the destination and time, the request gets registered with the back end and mGaadi adopts different methods to connect with the auto drivers. “Some have GPS devices, some adopt automated ways to disclose their location and in some other cases we contact the drivers to find out where they are,” explains Prakash. Depending upon when and where the trip is coming up, the customer service team matches and assigns the right driver for the request. “Over a period of time most of this will be automated,” says Kuruganti. The company has a total team size of about 15 people, which comprises backend, customer service, field operations and engineers’ team.
All mGaadi drivers use the meter and its service is free for customers. “Only if they agree to use the meter do they become a part of our network,” says Prakash. However, the meter fare plus an additional amount of Rs. 10 is collected as pickup fee, which is directly payable to the driver by the customer. This additional amount, which is cost to the customer, goes to the driver as he comes from anywhere within the 1.5 kms radius for a pick-up. The company charges the driver a referral fee of Rs. 5 for every trip he/she fulfils.
So far, mGaadi has added around 2,400 drivers in its network and it’s adding 100 more drivers every week. It plans to have a network of 20,000 drivers by the end of the year.
Spreading the word
The drivers who are enrolled with mGaadi have information about its services and apps, inside the auto. It also reaches out to companies and apartments to popularise its services.
As for enrolling drivers, there is no mass way of doing it, even though drivers influence each other both positively and negatively. Every one of them has to understand the terms and conditions and become a part of mGaadi. “It is always difficult to enroll drivers in areas where you have to start afresh. Once a large section of drivers become a part of our network, enrolling new drivers will be relatively easy,” states Prakash.
“However, convincing the first 5,000 to 10,000 is the hardest,” admits Prakash. Getting this number requires evidence of positive results. But, since it is the starting stage, there are times when things work and times when it does not. “My first 100 was very hard and the next 500 was not very different. But then, the moment we crossed that number, it became relatively easier and we knew what to say to the drivers,” recalls Prakash. The founders learnt from this experience, trained their staff to handle queries and started using technology on-ground for enrolment.
From a commuter usage point of view, there is a challenge when you start something new. “Every time you create a new product, people compare it with an existing service. They ask us if we are similar to Uber or Meru cabs. Our answer is yes, but, in our case we are dealing with independent players who have always been on their own under government controlled pricing,” clarifies Prakash. “However, what is interesting is that people acknowledge that there is a need for such a service,” adds he
On a growth path
Over the next few years, mGaadi aims to include other value added services that will make its services more reliable and predictable. It also wants to make the whole process cashless so that a customer can avoid no change tussle, especially during late night journeys. Prakash is also betting on the changing trend in the usage pattern of a customer. He reasons, “Today, if you want to book a bus ticket, you don’t go to some agent. Instead, you book through your mobile or computer.”
mGaadi was self-funded initially as the founders wanted to see the proof of concept and later got some investment from angel investors. More recently, in May 2014, it got seed capital from Unitus Seed Fund and the company intends to use these funds to increase the scope of its technology in many levels, make it easier and predictable and help scale across the multiple cities (including Tier 2 cities). “We definitely plan to scale to at least one or two more cities in the next one year,” states Prakash.
The company is sitting on a large market potential. There are 1,60,000 autos in Bengaluru (five million autorickshaws across India) and the biggest taxi player in the country does not have more than 10,000 vehicles. With such a potential, mGaadi aims to be a dominant player in the commuter market place in the next five years by significantly contributing to last mile fulfilment. “Our opportunity is that our business does not mess with the local RTO rules as one strictly pays by meter,” says Prakash on a concluding note.
FACTORS TO KEEP IN MIND WHEN RUNNING A SOCIAL ENTERPRISE
All companies should come out and solve a real pain point that people have; if there is value in it, people will pay for it.
Though an enterprise cannot run without profit, there will be situations when business considerations may take over the mission. In such circumstances, they should remember that they are here to solve a real problem and should not compromise on that mission.