Auto-rickshaw market is seeing some concerted action from the entrepreneurs and the investment community. Recently, we have talked about how the Shell Foundation and EMBARQ India backed three startups in the $10 billion Indian auto rickshaw industry. Today, active early stage investor Unitus Seed Fund has announced an equity investment in mGaadi, a mobile-commerce ordering service for auto rickshaws which started operation in 2013. According to the official announcement, mGaadi will use the investment to further develop its network of auto drivers, to enhance its technology platform, and to prepare its operations for significant expansion in Bangalore and other India metros.
Auto rickshaws have poor consumer perception and limited earning potential for drivers. This investment further corroborates the potential of the market.
India’s basic individualized public transport option is the auto rickshaw with more than 50 lakh (5 million) drivers across India’s metros. Bangalore’s 160,000 auto rickshaws represent 3% of its vehicular traffic but carry a whopping 30% of daily commuter trips. Commuters regularly experience challenges finding autos when they need them, and face further issues dealing with drivers refusing rides, charging high fares and generally not being courteous. Many auto drivers struggle to earn their daily income targets or to increase their incomes by working longer shifts. The result is a disorganized and highly inefficient system which no one is happy about.
Technology enables better rider-to-driver matching, more transparency, and higher earning
Further the announcement mentions, the growth in affordable smartphones and low-cost GPS devices in India enables the opportunity to create new location-based services that can reach the masses. mGaadi has launched a service which enables consumers to order an autorickshaw for near-immediate pick-up, or to schedule a pickup using their mobile phone – either through an app or a voice call. mGaadi auto drivers are then connected to riders based on their location and availability. After each ride, consumers rate the driver experience; only the best drivers are kept on the network. mGaadi’s approach improves the service quality by leveraging crowd-sourced ratings. And the best drivers get more fares, thus increasing their daily revenue. Bangalore-based riders can download the free mGaadi app on the Android Play Store and the Windows Phone Store directly from their smartphones. They can also use the web app at http://mgaadi.com or by calling 080-4242-1414.
Pay by Meter and more
"mGaadi auto drivers commit to a high-quality customer experience including: (a) always accepting riders; (b) always using their meter; (c) driving safely; and (d) maintaining a courteous attitude. All of this adds up to a more affordable, convenient, reliable, safe, pleasant, and consistent experience."
“Our premise for mGaadi is that alleviating commuter pain points and improving auto drivers’ incomes are akin to two legs of the same body, you can’t move one without the other,” said Solomon Prakash, co-founder of mGaadi. “We realized that there are at least 20% five-star drivers out there and we want to allow consumers to connect to those drivers to have a more reliable, quality commute solution.”
Team and traction
mGaadi has already signed up over 2,100 auto drivers to their network in Bangalore. Over a quarter of the drivers have already been rated by customers. They have just setup a new call and operations center with improved capacity in order to handle the number of auto order requests which are growing rapidly month over month. They have released beta versions of their apps for Android and Windows Phone and will soon be launching all new apps based on customer feedback. The iPhone version will also be released soon.
“India’s consumers are wild about smartphones, and now they can use them to schedule an auto rickshaw whenever needed,” said Will Poole, Managing Partner, Unitus Seed Fund. “mGaadi is bringing Uber-like convenience to auto rickshaw riders, addressing a massive need in India’s growing metro areas.”
Unitus Capital was the financial advisor and Impact Law Ventures was the legal advisor on this transaction, advising Unitus Seed Fund.
mGaadi is an mobile-commerce auto rickshaw ordering service provided by Bangalore headquartered India Drivers Network Services Pvt. Ltd.. It was founded in 2013 by Solomon Prakash and Vishy Kuruganti with a vision to make local commuting reliable and easy for commuters and improve and stabilise incomes for auto rickshaw drivers.