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Photo credit: Emanuele

Billions of dollars are being poured into on-demand taxi services across Asia as investors fight each other to grab a piece of the pie and avoid losing out in the frenzied gold rush. The likes of Ola, GrabTaxi, Uber, Didi Kuaidi, and Careem are all armed to the teeth with massive marketing budgets and will seemingly go to any lengths necessary in order to acquire more users.

But it’s essential to dig a little deeper. How have O2O taxi startups proven to be so wildly popular, to the point that they’re digging their heels in for a protracted battle against each other? The answer simply lies in the fragmented and chaotic nature of Asia’s existing taxi industry. Long viewed with suspicion and mistrust, aggregator startups harness the power of the internet to provide transparency and clarity for end-users. And they love it.

One such startup trying to bring a localized version of the Uber model to Bangladesh is BDcabs.

A dispatch system

BDcabs is a little different from other popular aggregator startups in the continent. Its core focus is on the technological aspects of operating on-demand taxi services. Factors, such as supply of cars, are handled mostly by its partnerships with existing rent-a-car companies and metered taxis. Aggregation of private cars is a distant third.

Founder Ishraq Ahmed tells Tech in Asia that they started engineering an on-demand system in February 2012 and designed it such so that it could work with all big operators. Their core software, which is already in use by some companies in Bangladesh, is kind of a “dispatch system,” which connects users requesting rides to idle inventory in their fleet.

How their app functions is also different from the way Uber does, for example. When a user requests a ride, they’ll be shown several options, depending on their estimated travel distance, and whether they need a ride immediately or for later. If they’re looking for a car immediately, then it’s likely that BDcabs will relay their request to a closeby metered taxi, or “yellow taxi,” as they’re referred to. However, if the ride is being requested for in advance, then a rent-a-car company will likely comply with it, as rates are somewhat cheaper.

Think of the startup as a marketplace with on-demand features. It’s like Uber with taxi companies included.

“In Bangladesh, we like to haggle a bit, negotiate. So when you select your ride, you’ll get offers from metered taxis as well as fixed operators. It’s not like Uber where you are instantly connected to the nearest available car. You get to choose from several options,” explains Ishraq.

As for fares, Ishraq elucidates that there are different models, dependent on the type of car which will fulfill the request. If a metered taxi comes to pick you up, then the fare will be wholly dependent on the rate it quotes at the end of the journey. In the case of a rent-a-car driver, or private car, then BDcabs will suggest a price based on the time and distance traveled. The driver can either choose that price, or input one of their own, which will then be added into the options displayed to the user. Hence, in the case of rush hour, prices can surge as there’s more demand and fewer cars.

As for monetization, BDcabs takes a cut from each ride processed through its system. For individual drivers the rate varies from 10 to 15 percent. For metered taxis it’s a fixed rate of 15 Taka (US$0.20) per ride, while for others it’s 10 taka (US$0.13) per ride. Users can pay via cash, credit card, and mobile wallet.

Security concerns

Ishraq says one of the reasons they didn’t deploy the Uber model from the outset is because of differing structural dynamics in the Bangladesh market. “There are security issues with individual drivers,” he outlines. “That’s why we have partnerships with ‘yellow cab’ companies.”

One of the companies the startup is working with is Tomataxi – a private fleet operator in Bangladesh, which currently has over 250 cars. Ishraq says consumers prefer them as they’re professional, with brand new cars, and vetted drivers.

The startup officially launched operations three months ago and claims it gets about 300-400 requests per day, spread across its web, app, and hotline channels. It’s present in Dhaka, Syllhet, and Chittagong.

As for its future, Ishraq says existing taxi companies are now transitioning into the BDcabs software. “That’s a major user acquisition channel for us,” he adds.

This post Homegrown startups are catering to Bangladesh’s on-demand taxi boom appeared first on Tech in Asia.

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