Bangalore based Yourcabs: What Made Them Click?
The recent funding flurry in the Cab Rental Space saw Yourcabs being funded by Sprism and others. One might wonder as to why is so much trust being bestowed upon this segment. The answer seems to be pretty simple: There’s a problem, there is a reasonably well known solution and there is space for many to survive. But to survive and thrive, one needs to do it right. What has made Yourcabs, a year old startup, rake in crore rupees in revenues in the short span? I got in touch with Rajath Kedilaya, the co-founder at Yourcabs to learn about it.“We started thinking about the B2C car rental space sometime in late 2010. My co-founder Shishira had a good idea of the B2B segment and when we started talking about B2C, we realized that there is a significantly large market with no dominant player.” says Rajath about the germinal thought. The initial idea was to have their own fleet and take it online, but they soon realized that to scale across the country, aggregation was the best way forward. “We spent some time understanding the space, built the platform, and launched in April 2011.” adds Rajath. Car Rental, being a fragmented market meant that there was a big opportunity to build a separate process, targeting both supply and demand. This was the primary driving force for them take the plunge.
The company generated a turnover of 1 crore in its first year of operations in Bangalore. “Our gross margins are in the range of 12% but frankly we have not put in a lot of effort in maximizing this. This is a space where people are ready to pay more, provided that the service level meets certain benchmarks; hence we are more focused on the service aspect at this point.” says Rajath about their profit margins.
The marketing has been mainly through SEM and SEO up until this point. Word-of-mouth and customer referrals have made the organic growth possible but moving on ahead, Yourcabs plans get into direct sales where they tie up with corporates and other institutions.
Currently, Yourcabs has around 15 active vendors and another 20 semi-active vendors. The combined fleet size would be in the range of 700-800. “Apart from expansion, the inflow of funds will help all of us innovate and refine our model better.” says Rajath. The first few months were very rough for Rajath and Shishira. “Yourcabs is still very young but I remember the times when we had to handle escalation calls all through the night. We had quite a few setbacks initially, which really helped us rectify the issues quickly and clean up our operations. It was stressful at that time and literally kept us awake, but we're glad that it happened early, since it forced us to innovate and push ourselves.” says Rajath.The first round of funding has made the road a bit smoother and metro cities are in the line of fireas they plan to expand. “We might also look at tier-II tourist towns as there is a large demand for outstation cabs in such places.” adds Rajath. Talking about the future, he says “Car-pooling, in theory, is a great idea but haven't seen a good implementation yet in this country. We haven't given it much thought but safety and liability might be one of the key reasons why it hasn't caught on. Maybe a model where there is a tighter integration with existing social networks along with location-based sharing, might work.” He concludes by saying that car-pooling might be something they focus on down the line.
You can find Yourcabs here.
