The “aggregator model” has created quite a stir in the startup world and served as a launchpad for many businesses. No sooner did cab aggregators prove they have the Midas touch, startups using the aggregator model for inter- and intra-city trucking services started mushrooming.
The popularity of the model is further validated by the fact that 14.4 per cent of India’s GDP is spent on logistics and transportation. However, this number is still 8 per cent less than other developing countries, according to an industry estimate.
Even India’s largest tractor maker Mahindra & Mahindra has not shied away from embracing this opportunity. Last year, it has launched an intra-city logistics aggregator platform called SmartShift, which acts as a load exchange platform for both cargo owners and transporters.
The SmartShift Android app allows Cargo Owners to book a vehicle in three minutes, choose from a range of certified and trained SmartShifters to ensure that the consignment is delivered safely and securely. Cargo transporters can avail the option of accepting or declining a delivery request based on pricing or the availability of vehicles.
However, since 2014, the community has sensed the opportunity and come forward to address the demand-supply gap in this market. Here are the few names:
Faces of the company: Vasanth Immanuel and Jay Panneerselvam
Business value: OLog allows cab bookings where customers put in a request and the transporter responds to it. A minimum of four hours of lead time is required prior to the pickup. With 25 members, OLog’s team comprises supply managers, customer care operators, and IT operations.
Growth metrics: Chennai-based OLog has 12 clients, 300 vendors, and 1,750 vehicles
Faces of the company: Senthil Kumar and Vasister Arun
Business value: The Chennai-based startup allows customers to book mini trucks using the customer facing Web applications they have developed. The nearest truck drivers receive the trip details through SMS, and the interested drivers can choose to accept the order. The drivers then contact the customers, arrive at the pickup up point, and deliver the goods to the destination.
Growth Metrics: GoGo Trucks has a network of 300 trucks and 50-60 vendors. Currently, it receives 1,800 orders per month.
Revenue Model: It shares revenue on each transaction that takes place through their platform with the driver. Customers pay the driver cash after the delivery is completed. They are working on an online payment gateway to facilitate payments and plan to offer incentives to customers who book and pay online through their mobile app.
Faces of the company: Nithin Baalay, Arun Rao and Abhishek Bajpai
Business Value: This Hyderabad-based aggregator aims to organise the intra-city transportation problem. It caters to the on-demand requirement for both transportation and the mini-truck owner-cum-driver. The company claims they are 40 per cent cheaper than other alternatives available in the market.
Growth Metrics: They are currently doing 17,000 orders in a month, and have onboarded 900 customers.
Faces of the Company: Pranav Goel and Uttam Digga
Business model: Mumbai-based The Porter is an aggregator of light trucks, and allows businesses and consumers to hire trucks and tempos on demand for their intra-city pickup and delivery needs.
The Porter provides reporting and intelligence tools that allow businesses real-time monitoring of the vehicles they use. It is developing APIs that would enable SMEs and startups to integrate this logistics system with the customers’ internal processes.
Growth Metrics: As of June 2015, the startup said that they had 300 vehicles handling 10,000 transactions every month in Mumbai and NCR.
Fund raising: The Porter raised Rs. 35 crores in Series A funding from Sequoia, Kae Capital and other investors.
Keeping inter- and intra-city logistic services as a base, startups are vying for the crown in the truck aggregator space. There are also other startups in this space like Blowhorn (a marketplace for last-mile logistics, which connects the owners of mini trucks to the customers), ReturnTrucks (which connects truck and load owners through a truck and load matching platform) and TruckMandi (a marketplace for trucks allowing transporters and vehicle owners to directly connect with businesses and customers).
According to a report by Novonous, India’s road freight comprises around 63 per cent of the total freight movement of 2.2 million heavy and 0.6 million light duty trucks.
Looking at startups’ business models (which are similar to each other), it is very difficult to evaluate the success metrics based on scalability, funding, or innovation. The overcrowded market also has the possibility to witness consolidation in near future.