Foodtech meets bike taxis to solve your hunger and commute issues
Many a startup has been born with the idea of solving everyday problems like commuting, traffic and road rage. From cab aggregators like Ola and Uber to shuttle bus services like ZipGo and Shuttl, and more recently bike taxi services, these are working towards the same goal – making everyday commutes easier.
NOW is one such bike taxi and delivery platform that allows consumers to not only avail bike taxi services, but also helps merchants deliver groceries, food, and medicine to their customers. The service also allows individuals to send packages within the city, working as a C2C (customer to customer) courier service.
Hitting a wall and creating a path
After travelling in South East Asian countries and Indonesia and Bangkok and using several bike taxi services, Vivek Pandey was toying with the idea of starting a bike taxi service. The delivery model came in as an after effect of the food delivery business he was working on.
The team had hit a rough patch with their foodtech start up due the negative funding scenario in the segment. Vivek adds that even when they had the best unit economics in the industry (Rs.21/package delivery), he realised that they should build a business that makes economic sense rather than just being investor dependant.
“That was the moment I decided we would maximise the utilisation of the delivery workforce and build a unit-level sustainable model,” adds 36-year old Vivek. He adds that Go Jek’s hybrid model, which increases rider utilisation by using bike taxis, for delivery and shopping impressed him a lot.
Most delivery companies currently are under pressure due to underutilisation of riders because there are certain peaks during the day where capacity has to be planned. However, the order flow doesn’t sustain through the day. This is true with Bike Taxis as well, as it solves a last-mile problem where peak demands are in the morning and evening, during office hours, and then it tapers off.
The customer requests a bike for a ride or delivery on the app and he or she is matched to a driver who is nearest to him geographically. The driver accepts the request and he and the customer get connected. Once the ride or delivery is completed the customer can pay via wallet or with cash.
Bringing in complementary skill sets
The core founding team comprises Vivek; Bharat Khandelwal, who is ex-Times Internet and the COO; co-Founder Sushant Arora, an IIT Kanpur alumnus ex- Flipkart who is Director Ops; Parteek Singla, an IIT Ropar alumnus ex- Tinyowl and Snapdeal who is VP Engineering; and Harpal Singh, ex Knowlarity who is the other Director.
Bharat and Vivek had dabbled with creating an online events marketplace in the past. Though they shut it down, the duo always wanted to start something of their own. They nevertheless parted ways, and Vivek went on to join Flipkart and Bharat went on to be a part of Times Internet. Nevertheless, they got together in Delhi and started Tap Food Delivery a food delivery app early last year.
“Our first team member was Harpal, who handled backend development. Sushant, who was my junior from IIT Kanpur and was also at Flipkart, joined in,” adds Vivek. Sushant brought some method to the madness by introducing some of the logistics processes he had learnt being a part of the Flipkart supply chain.
The team was close to raising their institutional round in October 2015, when foodtech as a sector faced negative backlash. This impacted their startup and they were unable to raise funding and that was when they started working on NOW.
It was in January that the pivot took place and by March, NOW had raised two rounds of funding. It was at the same time Parteek joined in as a Co-founder. The team raised funding from angel investors Ruchirans Jaipuria –MD of Jaipuria group and Anuj Sanghi from the Sanghi Motors Group. Vivek adds that they raised $500,000 from them. They also raised a pre-seed round of Rs, 10,00,000 from Maple Capital Advisors and Abhinav Grover, Director at Maple Accelerator.
The team’s tie up with Jaipuria and Sanghi have strategic interests as well. NOW has tie-ups with Jaipuria Group’s retail distribution network of over 200,000 outlets and 1,000 restaurants and the Sanghi group’s tie ups with auto OEMs and lenders.
Creating newer paths
While the team had the idea and pivot in place, they had to secure governmental clearances and cross several roadblocks. To overcome this, the team made a presentation to the Regional Transport Authorities, where they explained the safety norms they had in place and benefits that the service would have.
On the delivery side, things were a bit easier as they already had a bunch of food delivery relationships and their offering was much better in terms of metered pricing and app ordering. Vivek adds that they overcame the problems of scale by launching in the same cluster (around Sector 18 Noida), where they had launched their food delivery business.
“We had a rider pool, and were well aware of the geographical hotspots for delivery; we used this cluster as a test bed to perfect our processes, field test the product in the months of January and early February and then proceeded to expand to other clusters in Noida. In the first week of March, we launched in Faridabad as well,” adds Vivek.
To ensure commuter safety, NOW has ensured that complete police verification and KYC of the drivers is done by third-party vendors. There is also a support button in the app, which works as an SOS for the bike taxis and call centre for delivery.
The ka-ching of money
The NOW Delivery Platform was launched in the first week of January and the bike taxis were launched in the last week of the same month. Since then, the team claims that their numbers have grown from 10 rides on day one to 150.
Delivery numbers have doubled to 200 a day from 100 in January. Vivek adds that this was from the inertia they had from the previous food delivery platform. “We make an average GMV of Rs. 35 on every transaction. Currently, the team is at 500 deliveries and 350 rides,” adds Vivek.
The team says they will be doing 30,000 transactions in the month of April and hope to record a revenue of Rs. 10,00,000. The team aims to create the best ride and delivery product that provides a great experience to both individuals and merchants. They aim to first capture the Delhi NCR market before expanding across India.
“We intend to create a B2B distribution network for merchants and a courier delivery network for individuals and create a trusted last-mile commute framework,” adds Vivek.
The growing bike taxi market
Ola and Uber MOTO might have removed the ‘bike’ services from their app and face close scrutiny from government bodies. The bike taxi market nevertheless is thriving and growing. In Gurgaon, Noida and Delhi NCR alone M-Taxi and Baxi are operating, apart from NOW.
Currently, M-Taxi claims to do over 40 rides and Baxi over 140 rides daily. Baxi has a fleet of 23 bikes, while M-Taxi has an inventory of 10 bikes and plans to add 100 more in a couple of weeks.
However, regulations that vary from State to State can become roadblocks. Prior to M-Taxi and Baxi, Mumbai-based Hey Taxi had started a bike-taxi service in some parts of the city. However, the Mumbai Regional Transport Office suspended the service stating that operating a two-wheeler taxi service does not fall under the Maharashtra Motor Vehicle Rules. The government body also says that the city currently didn’t need motorcycle taxi services.