Readers respond: Why carpooling will not fail in India

Last week, I wrote an article on why I believed carpooling will not work in India.

The gist of my argument is: the problem is not related to technology, but to behavior. Car owners cherish their cars, and do not want to feel like a cab driver. Passengers feel irate if the scheduled car to pick them up for their carpool is late. In office situations, pre-planned carpools mean that employees need to synchronize timings, a difficult ask in today’s working environment.

You can read the entire article here.

The article seems to have touched a chord with readers. Many commented on what could be done to get the concept to work in India. Some felt that consumer behaviour will change if the benefit is clear. Others cited earlier research on carpooling efforts that had failed.

I also received emails from readers who were running carpooling services, or felt that there was more that was not debated.

There were interesting viewpoints in the responses. For those who emailed me in person, I asked permission if I could share their views publicly.

I have compiled many of the interesting responses the article received. I have edited these to retain the gist in some cases, and to present a cohesive narrative.

What will change consumer behavior?

Almost everyone agreed that for carpooling to work, consumer behavior needs to change. Where we differed were on how soon this would happen, and reasons why this would change.

 Vardhan Koshal, co-founder of ridingO, wrote in saying:

While I would not like to sound as sure as Shrinath, I strongly believe that carpooling/ ride sharing can bring a paradigm shift in the way people commute in India. After all I left my job to follow this belief.

We have had similar skepticism around online shopping before Flipkart. Ebay, Indiatimes, Rediff etc. tried hard to become Indian Amazon, but did not succeed. Service was pathetic and trust was low. Today, my 55 years old Dad shops online happily with his SBI debit card.

People might say that it was an external push with increasing internet penetration, online banking etc. which revived Indian e-commerce. But I believe it was much more than that.

Another big shift in recent years has been around The Grand Indian wedding. So traditional and close to heart of all uncles and aunties excited about matching potential marriage candidates. One could not have imagined people making matrimonial matches online in 90s, but here we are with Shaadi.com, Bharat Matrimony etc. becoming giants. It's an impactful example of strong behavioral change. There are plenty of similar examples like Airbnb, iPad etc. which brought behavioral changes in people.

I think if problems are understood deeply and a penetrating solution is created which is trustworthy, easy and fun to adopt, people do change their behavior.

 After all our (ridingO's) focus on problems like trust, cash exchange awkwardness, social incompatibility/ uneasiness etc. shows that we are working hard to solve behavioral problems than just physical ones like route and time matching.

The fact that more than 900 of these Indian "car-worshiping" owners from Bangalore have registered with us, gives us a hope in that direction. And arguably these people have diverse financial background as it's not just hatchbacks, registered cars with us include luxury sedans and expensive MUVs/SUVs as well.

Your observations point towards opportunity for us to design more thoughtful solutions and help people change their behavior by adopting a more efficient option.

Navin Kulkarni, Chief Designer at Achievee commented that the solution lay in having great user experience and in writing smart copy.

He echoed similar sentiments about why things would change:

• We even shop undergarments online
• We get movie tickets online
• We are no longer scared of loosing money in online transaction
• We read newspaper online
• We learn skills of livelihood online
• We have stopped meeting friends because of Facebook
• We find jobs online
• We find our life partners on online portals

List is endless..

Oh yeah!!! @Shrinath, consumer behavior DID change and it happened soon enough!!

While I appreciate the arguments, the cases mentioned have solved a problem of ‘access’ more than behavior. The first real online success in India was IRCTC. The convenience it brought was hard to miss. Instead of waiting in queues to buy tickets (people traveling south for vacations from the north often slept overnight to ensure they got tickets when the booking counter opened the next day).

The shift in consumer behavior came in the desire to transact online. People figured that the risk of having their accounts drained maliciously was unfounded, and new behavior in response to convenience emerged.

Online shopping followed the same pattern. It made things easier, people grew comfortable paying online. However, to achieve scale, even online shopping had to evolve a Cash-on-delivery model, keeping in mind that many consumers didn’t have cards, and of those who did, many preferred paying by cash.

In all these cases, websites offered a promise of making things easier, but the sites worked because of the fulfillment network offline. In each case, the companies have a fairly large degree of control about the fulfillment process. Online shopping sites ship the product to you and offer a means of returning stuff if damaged or unsuitable for your purpose. In case of carpooling, the participants determine the experience, not the company. This is a lot more difficult to ensure control over.

Take matrimonial sites. Earlier, family elders matched horoscopes and found partners. Online sites just make this easier. Every online portal promises to match horoscope, allow caste based matches and let prospective brides and grooms see photos online. Nothing fundamentally changed. The earlier behaviour transferred online with additional benefits (being able to scout many more prospects).

My point is: carpooling has to have benefits that far outweigh the inconveniences and potential risk. Carpoolers abroad enjoy benefits of having special lanes that allow them to beat traffic rush, and often reserved parking slots as well.

For carpooling to work in India, there has to be substantial benefits for all involved. I will be glad if one of the carpooling services cracks this.

Note: I agree Airbnb is a service that I would have claimed will never work. Letting strangers into your house has risks more than letting them into your car. If Airbnb cracked this problem (see what the founder Joe Gebbia told us when visiting Yourstory in Bangalore), smart carpooling apps might do this too. I’ll be happy to have my scepticism proven wrong.

What could make carpooling work?

I based my arguments on what I’ve seen interacting with consumers on ground. I have spent time in auto-expos and car accessory shops across many cities in India, talking about the benefits of navigators to prospective customers. I observed how people across cities felt about their cars, driving and traffic first-hand.

I also know of services that tried carpooling a few years ago, but failed.

Shaifali Gupta, UX designer at Rivalogic, shared research she had conducted on carpooling. You can read it here.

An argument I heard, and concede to, is that the current situation may not mirror the past. Many things have changed since then - more people have cars, fuel prices have increased dramatically and there is greater awareness.

Kapil Aare, tech lead at Happiest Minds, felt that we have more innovative carpooling services that offer different benefits. Being able to earn from carpooling was benefit enough, as per him.

Varun Gandhi from Delhi says:

“Let start by calling it 'Social Traveling'.. It doesn't solve the problem but it makes me feel better..

and Social Traveling is not just a change of name.. but change of outlook.. It's not about saving a penny by pooling.. but revolutionizing the over all experience of travel..

By overall experience I mean, Utter Comfort (of traveling with people we know or can know -- considering such a connected world we live in today -- we can make it happen).. Awe-Convenience (Zero Negotiation with an Auto Exchange of Money).. Fun n Awesomeness (of traveling to all places not just office).. Affordability..”

Madhu GB from Guitarstreet had an interesting question of whether carpooling can be gamified.

Rishab Mathur from vserv.mobi says:

I go to my workplace daily and return in carpool from mira road in mumbai to andheri,

who says it doesn't work, although it unorganised, car owners pick random office goers from bus stops on their route, they charge around 40 or 50 for the journey.

there are plenty and plenty of carpoolers here, only you need to know the right place where you have to wait for it.

Actually the carpooling apps and product companies are trying to bind people together, they are not facing ground realities, there is no need to fix the people with a group , any random car you may get into, you don't have to wait for a particular person...

carpoolers are smart people who see it as an opportunity to save toll, petrol for daily commuting, there is no need to organise it with app. only thing you need to know is the place or hotspots in the locality where you get the car, comfort seeking individuals who can pay 40 or 50 are always many in numbers, In my locality, even its now a daily business for taxi drivers to take a long route carpools.

Making location based apps and coordinating people with apps is an overkill and unnecessary.

Many others said that dynamic carpooling, in which case you don’t have to wait for the ‘right’ car or passenger would fare better. It still does not address the risk factor, but this could catch on. As Werner Egipsy Souza from Goa pointed out, this behavior is already in vogue in villages. Raxit Seth from Smart Mumbaikar claims that they have designed their service to allow people to share cars/taxis/two-wheelers and autos. I am sceptical about two-wheeler pooling, more than cars, as the risk factors are higher. But I can see how shared taxis and autos would work. Shared autos have been around in places like Chennai for long, and even some auto guys in Bangalore offer a reduced rate by picking up other passengers along the way.

mebuddie.com pointed out that SAP has launched a carpooling app called TwoGo, based on its own platform. This has reportedly resulted in savings of around $5 million for SAP and its employees since 2011. Read more about this here.

Vidya Shankar, consultant with Infosys is an ex-entrepreneur and has researched this space for a while now. He writes:

I have experienced a tremendously successful carpooling system within a top IT services company where I work for. I have been using this system continuously for the last 15 months.

I have experientially seen carpooling work in the following situation

1. Trip Type:

Outstation travel on weekends.

The trip distance ranges between 200 kms to 500 kms. The travel time is usually between 3 hours and 7 hours. People do not like to drive for distances outside this range.

2. Target customers:

Car owners that share the car - 

• Age group: 26 - 34
• Bachelors (guys only. Girls dont generally prefer to drive) is one group
• Couple married for more than six months without kids is another group
• They will share car only with people that they trust. Usually co-workers in the company, friends and friends of friends in other companies)

 Car passengers that seek carpooling-

• Age group - 22 - 32
• Bachelors is one group
• Couple married for more than six months without kids is another group

I have never seen anybody other than these two groups in the last 15 months of my using the carpooling system

Usually small cars are the ones that are shared.

Swift Dzire is the biggest car that I have seen on the sharing circuit.

3. Why do they share:

Car owners: Long distance travel is expensive unlike the daily commute to office. Car owners almost load their complete travel cost on the co-passengers. In some cases they end up earning money as well, especially if its a diesel car.

Car passengers: Even in the worst case that the car owners earn money, the expense that passengers incur is lesser than / same as what a private bus charges. Plus they travel in comfort of a car.

Both:

Allows them to plan trips at the last minute and travel comfortably yet economically.

Also the pain of having to put with with co-passengers is less frequent and lasts only for the duration of the trip unlike daily commute. 

4. What is irritating in the entire system? What should carpooling businesses address?

1. Dropouts: There is no booking system. Both car owners and passengers confirm on phone and drop out at the last minute citing excuses. This puts a passenger in lurch as he has made no alternate arrangements to travel. This puts a car owner at loss as he refused other passengers because he thought his car was full.

2. Optimizing Passenger intake: A car owner may be travelling a 400 km distance to City X. There are requests from passengers to drop at city A, city B, city C enroute to city X. The owner wants to maximize his profit. So he confirms to every body - city A passenger, city B passenger, city c passenger and a city X passenger.

Now if there is a new request from another passenger for city X, owner gives some dumb excuse to city A passenger and cuts him off to incorporate the new city X passenger. A lot of such scenarios happen across city A, city B, couple friends travelling etc.

3. Exchange of money during travel. Makes the car owner feel like a cab driver

4. Waiting for a passenger or for the car driver who does not keep time. But since all of them are in the same office, you are waiting in the comfort of an office. Even though its irritating, its ok to some extent. However if you wait on the street for some one for more than 10 minutes, its very irritating

5. Car owners on boarding more passengers than what is comfortable. 5 people in a Wagon R is very irritating for a drive that is more than 3 hours long.

6. Car passengers asking for drop at a point that is out of the route. Especially ladies. Both guys and ladies ask for drops at home when its late night. Car owner is already tired after a long drive and just wants to crash or reach destination.

7. Preference mismatches: Want AC vs dont want AC, drive fast vs drive slow, music vs no music, take highways vs take a small circuit to give toll booths a miss

Other important necessities for carpooling business:

1. Travel only along with people whom you trust. This can be established by allowing this service only to people of certain well established companies - IBM, TCS, Infosys, Accenture etc who do a thorough background check of their employees. The chances of travelling with terrorists, smugglers, thugs and thieves is significantly minimized.

2. Position carpooling as an alternate to bus and train services.

3. Make booking more professional and rigid. I have a detailed thought process about this which I can share with interested entrepreneurs.

What is the money in this?

This is pretty less today. Using data points that I collated over 15 months, on an average about 15 carpools per weekend per company. That is approximately about 30 trips carrying 2.5 people on an average. That is 75 passengers. Each paying 300 rupees on an average.

Thats about 1L spend per month per month per company. If we take a 5% commission out of this, thats about 5000 bucks per company. Assuming there are people from 10 companies onboarded its about 50K revenue per city. Assuming operations in 4 cities we have 2L in revenues per month.

Other revenue streams can give another .5L per month. So a 2.5L revenue per month is the most optimistic figure for the next one year till a carpooling company is established as a brand. Then the tipping point will happen.    

What are other revenue streams?

I have 5 other well thought out revenue streams that I can share with entrepreneurs working on carpooling business, if they are interested in connecting.

Final take

It’s interesting to see how much people have thought about carpooling, why it could work and what are problem areas.

There are quite a few young services that are trying out solutions in the space. Maybe it will be a good idea to share learnings about your experiences to gather momentum for carpooling.

A final thanks to all those who commented and wrote in. The different viewpoints have been interesting to study and have made the debate richer.

Note: Views are of the author.

Reach the author at @shrinathv or [email protected]