'Wundering' how to tackle Bengaluru’s traffic snarls? German startup offers advice: carpooling

Online carpooling company Wunder, which connects commuters to people with empty seats in their car, wants to help unlock the world’s most gridlocked cities, and solve the problem of rising pollution.

Startup: Wunder

Founder: Gunnar Froh

Year it was founded: 2014

Sector: Transportation

Funding raised: Undisclosed

Based out of: Hamburg, Germany

A few mornings ago, a WhatsApp group was buzzing about two things - Elon Musk sending a Tesla on a SpaceX into space and Bengaluru facing one of its terrible traffic snarls. According to the Mercer 2017 Quality of Living Index, Bengaluru is among the cities ranked the lowest in infrastructure. Bengaluru, along with Delhi and Mumbai, is also among the top 20 cities with the worst traffic worldwide.

To make life easier and to decongest roads in one of the world’s most gridlocked cities, Gunnar Froh started Wunder in Germany. Today, the company has operations in the Philippines; late last year, it started operations in India.

Gunnar says Wunder is looking at India from a long-term perspective. A behavioural economist by training, Gunnar was Germany’s Country Manager for AirBnB.

Having earlier bootstrapped and co-founded Accoleo, which was acquired by AirBnB, and also having been the founder of a car sharing company, Gunnar looked closely at the space.

“I felt there was a need for a company that would help make commuting from point A to B easier,” Gunnar says.

Moving to emerging markets 

In 2014, while Uber had raised Series B funding, was entering a global market, and already had Benchmark and Menlo Ventures as investors, Wunder began as a ride-sharing company in Europe.

“However, I soon realised that the need to decongest was stronger in emerging markets. Also, with the effect of time and regulations in Europe, Wunder had developed itself to a purely peer-to-peer urban carpooling model in around 2016,” Gunnar says.

“This is when we moved our focus on emerging markets and launched in Manila, one of Southeast Asia's most gridlocked cities. We then moved to India, one of the world's largest consumer markets in the beginning of 2017.”

While Uber and local players are strong in Southeast Asian markets, Wunder works differently. It is an online carpooling community. Simply put, Wunder drivers share empty seats in their cars as they drive to a particular destination.

The workings of the app

The app essentially connects commuters to people with empty seats in their car. Anyone with a car can sign up on the app and connect with passengers who are headed in the same direction.

Gunnar says the driver shares up to two rides in a day and the cost of the trip is generally shared with passengers. On the other hand, passengers schedule when they want to leave for work, and the app calculates matches for a few days and confirms a fixed price. The drivers are presented with a few carpool requests and they have the option of accepting or not. The drivers are generally paid in cash for the trip.

A 15-km trip in Manila would cost 60 piso. Gunnar adds that Wunder doesn't have surge pricing, and fixed prices essentially cover fuel costs. Another important focus point for car-pooling companies is the safety.

Gunnar says as Wunder works as a carpooling community, the community members themselves work as the best judges of who they feel comfortable sharing their rides with.

The app has a public profile, which includes trip history, comments from fellow carpoolers, and ratings. The users of Wunder are verified members of the community, similar to a Facebook group of friends looking to share a ride.

A tough market to crack

In India, the regulatory challenges to run a technology-driven carpooling company are many. According to the Motor Vehicles Act, carpooling is illegal. In fact, any service that could possibly replicate a public mode of transport is considered illegal. Ola and Uber have, in fact, gotten into several legal minefields because of these regulations.

But there are nearly 70 million vehicles in India. According to a Pricewaterhouse Coopers report, the global carpooling market is estimated at $15 billion today, a figure that is projected to hit $335 billion by 2025.

MeBuddie, PoolCircle, Orahi and CarPoolAdda are some of the players in the carpooling business. Brazilian Tripda and French BlaBlaCar are the giants in the segment. In 2015, BlaBlaCar raised $200 million in Series D led by from Insight Venture Partners and Lead Edge Capital, to explore emerging markets, including India, Brazil and Turkey. This month, Gurgaon-based Orahi raised Rs 3.5 crore from Indian Angel Network.

Carpooling: the need of the hour 

However, a significant consumer behaviour shift is yet to be seen. Looking at the market, Gunnar says if one were to go by the numbers, India will by 2030 have over 68 urban sprawls, with a population of more than one million.

“In Europe, we will see only 35 such urban sprawls by then. In sync with this, with all other issues, will come the problems of urban mobility, including increased levels of congestion, pollution, inequality in access, and more. This gives rise to a massive opportunity for carpooling players in India. Delhi alone, with a population of around 25 million, has at least 10 million commutable trips,” Gunnar says.

He explains that almost every one of these points is also mirrored for most urban Southeast Asian cities like Manila and Cebu.

Gunnar says Wunder’s primary mission is taking cars off the road in these cities to ease traffic congestion and hence, lower pollution levels.

The company is currently not looking for monetisation, but in the near future has options such as transaction fees, advertisements, and using B2B modes to earn revenue. Aiming to hit four million trips globally by the end of 2018, Wunder may also have the option to work with central or local governments, if they are able to make an impact.

What the future looks like

Gunnar says, “Simply put, the fundamental factors we usually look at while entering any market are the openness of people to let others into their cars (the culture of sharing), internet and smartphone penetration, friendly government policies when it comes to adoption of alternate methods of commute, tech adoption capabilities, and stability of the business environment. If you include the entire National Capital Region into this, the number could possibly be at least 60 percent more.”

“We work at a purely non-profitable model right now in order to ensure that our commuters understand the importance of carpooling,” Gunnar says.

Wunder has taken a call on concentrating on its existing markets in order to increase its brand penetration and enable more commuters to discover the concept of carpooling.

“Our primary mission is taking cars off the road in these cities to ease traffic congestion and hence, lower pollution levels. This is in addition to developing our product into a more effective mobility solution,” says Gunnar, explaining Wunder’s short and medium-term plans for the future.