Product X – soap, for example – has always been used to do Y – clean things. It has managed to infiltrate the depths of the market with years of effort from a series of giant, global players who are all making a ton of money off its sales. Is there any way to take advantage of the infiltration, create another industry, and start something new – infusing the soap with nutrients to dissolve in polluted rivers, perhaps – with the same product?
Ashutosh Johri and Manu Rana, the founders of Baxi Taxi, a ride-hailing app for two-wheelers, would say yes. In their case, the product is in a category for which India holds the second rank in the world – two-wheeler scooters.
As of December 1, 2015, the Indian state of Haryana officially allowed two-wheelers to operate as commercial vehicles in the state, making it the second state to do so after Goa. The new-found freedom has arrived partially as a result of the founders’ hard work – which, as the team explains, has nothing to do with the pace of the government.
“It was easier to make this happen than it was to raise funding,” explains Baxi team member Rohit Koshy. “Imagine if you have a hundred people waiting outside your door. One has to be patient, but more importantly, one has to have legitimate reasons. For us, it was our product. We went and met them, they gave us feedback, we came back, and reworked our model, it went on and on like that.”
Baxi just announced a US$1.5 million round of funding from investors like Manish Kheterpal, partner at Canaan Partners, and Alok Mittal, CEO of Indifi Technologies and started operations on December 1st, which is coincidentally also Gurgaon’s “Car Free Day”. The team explained in a press release that they hope to raise another round of US$25-30 million in the next few months.
Two wheelers everywhere
The market for two-wheeler services is huge. While 20 million four-wheelers have been registered in India since its independence in 1947, this number is minuscule compared to the 115 million two-wheelers registered, Rohit explains.
In parallel with the launch of Baxi, Arunabh Madhur’s M-Taxi also announced its service and flagged off its first ride on Monday with Balbir Singh, deputy commissioner of police in Gurgaon. It also announced a round of angel funding last week.
“Motorcycle taxis are popular modes of transportation for the speed, efficiency, and company they provide,” explains Rohit. “I was heading an IT company on the continent of Africa before returning and it was exceedingly popular there. I’ve taken them several times.”
Still, others who have tried to enter the space in India have faced issues. In June, two-wheeler hailing app HeyTaxi! was shut down because it violated the motor vehicle regulations of the state of Maharashtra – the hometown of Mumbai. Verification was the big issue.
Other aggregators – even a behemoth like Uber, with its infamous rape case, for example – have had difficulties verifying the reliability of their drivers. “We’ve partnered with a large sourcing company for that specifically,” explains Rohit. “Starting from sourcing to verification to deployment, we check everything. We also train our riders on managing technology and making customers feel happy.”
And, while Indonesia’s Go-Jek has previously come under fire for taking jobs away from local ojek drivers, that’s not the case for India. “There are millions of youth in Gurgaon that can’t afford to pay for higher education but know how to ride a bike. In some senses, we’re bringing them financial emancipation,” explains Rohit. “We’re taking skill sets to someone who can now make over INR10,000 (US$150) a month.”
Sticking to customer transport
Whether it’s M-Taxi, Baxi, or GoJek, some safety features are standard across the platforms. A rider who hails a two-wheeler is provided a helmet and facial wipes. The focus is on last mile connectivity, often from metro stations to homes or remote places where buses don’t go.
While both M-Taxi and Baxi are wary of entering India’s goods-transport industry, plenty of logistics startups are using them to reduce costs. Even further, Indonesia’s GoJek has launched GoLife, entering the on-demand market for everything from masseuses to beauticians.
Still, Rohit explains that Baxi wants to focus on transporting people. “Once we figure out a five-minute model for things we’ll start entering different spaces,” says Rishi. “We’re not looking to burn cash unnecessarily before we crack efficiency.”
And, what’s stopping Ola or Uber from getting into the two-wheeler market? “They’ve got too much on their hands,” says Rohit. “No time to focus on this.”
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