With over 650K customers and Rs 61 Cr in GMV, DriveU is on path to profitability
On-demand driver and car servicing startup DriveU generated a revenue of Rs 61 crore in FY23, and aims to grow 2X at Rs 120 crore by next year.
Father-son duo Ashok Shastry and Rahm Shastry startedin 2015 to offer technology-driven, on-demand, and affordable private driver service.
“We saw there was a huge opportunity to improve both the driver and customer experience if we were able to provide transparent pricing, assured safety, uniformity, and scale via technology,” says Ashok.
In 2021, the car drivers’ aggregator platform launched DriveU super app to offer additional services such as doorstep car wash, car servicing, FASTag recharge, and insurance renewals.
The platform currently has over 65,000 background-verified drivers in Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Ahmedabad, Kolkata, Pune, and Coimbatore.
After doubling growth in FY23 and raising multiple rounds of funding till now, Bengaluru-based DriveU is now planning to launch a premium driver service called DriveU+, which will offer experienced and verified drivers to customers. It is also in talks with investors for raising its next round of funding.
“Our aim is to raise $10 million through equity and debt to fuel exponential growth and expedite product development,” Ashok tells YourStory.
“Although we are EBITDA+ and cashflow breakeven, our primary focus is to expand our car ownership services geographically and further penetrate our core driver service product within the cities we operate. We’re in active discussions to raise a sizable funding round to expedite these growth objectives,” he adds.
Owned by Humble Mobile Solutions Pvt. Ltd, DriveU’s primary goal now is to grow its revenue 2X to Rs 120 crore compared to FY23, up from Rs 61 crore at present, without an additional cash infusion.
In FY23, the startup generated a Gross Merchandise Value (GMV) of Rs 60.9 crore, a 126% growth compared to FY22, where it generated Rs 27 crore GMV.
Catering to B2B and B2C
DriveU’s core offering has been its driver services for both B2C and B2B customers. B2C users can avail temporary drivers on an hourly basis or on a daily basis. On the B2B side, businesses use DriveU's on-demand drivers in place of the fixed drivers that also incur a fixed cost.
“We have prominent clients in used car platforms, OEM service stations, and several insurance companies who use our service to improve their efficiency in operations and finance,” Ashok Shastry tells YourStory.
The startup also provides valet parking services to its B2B customers.
“This is a new vertical for us that we recently started. Currently, we are live with two pubs, Arbor Brewing Company and The Bier Library, but we have more in the pipeline that will be operational in a few weeks. We have tied up with more than 60 premium pubs in Bengaluru and Hyderabad to promote responsible consumption via DriveU branded material such as valet tags, standees, and special offers for the Pub’s customers,” he adds.
What it offers
DriveU conducts background verification (BGV) of drivers before onboarding them, which includes criminal record checks, court record checks, drivers’ licence, and address verification. The co-founders say this makes it stand out from its competitors like EziDrive, HOP, and Drivers4Hire.
“Beyond the quality of drivers we provide, we have built a robust tech-stack to ensure driver’s timeliness, fitness to drive a car, an intuitive app to request a driver in just seconds, safety services where we track drivers throughout the trip, and online or cash payment for the service provided,” says Ashok.
DriveU also provides optional trip insurance service to cover minor damages to the car, 24x7 driver service (most only operate from morning till evening), and 24x7 live customer support.
Further, the startup lets B2C users earn rewards in DriveU coins, which can be redeemed by them to avail services like doorstep car wash, car servicing, and insurance renewals through the app.
So far, DriveU has done over five million trips, says Ashok. The company has over 650,000 direct customers along with 150+ businesses across various services on the app. It has over 250K MAUs and over two million app installs.
The startup also recently partnered with MyGate to cater to the needs of car owners of the 25,000 societies on the MyGate platform.
Rahm Shastry and his Angel network based in the Silicon Valley provided the initial capital required to build the team and launch the company’s minimum viable product (MVP). Soon after, DriveU was able to raise $1 million from Unitus Ventures.
DriveU has so far raised $8 million through equity and debt financing. Its primary investor, Unitus Ventures, has infused nearly $3 million in funding over the years, with smaller firms and private equity investors from the Silicon Valley also participating.
Speaking about investing in DriveU, Will Poole, Managing Partner, Unitus Ventures, says, “For over ten years, Unitus Ventures has invested in startups that use technology to bring convenience and efficiency to chaotic sectors in India. DriveU is one of the very few companies in India that has done this both at scale and profitably.”
“Their on-demand drivers make more money and their customers get better experiences with well-trained and insured drivers. This is a win-win. As cities become more congested, the demand for flexible, reliable, and cost-effective mobility solutions will only increase. DriveU is well-positioned to serve these evolving demands,” he adds.
Capturing the market
According to a report by Statistica India, the total number of vehicles in India in fiscal year 2022 stood at 326.3 million. Road travel seemed to be the preferred choice in India with around 60% of the population who used personal or shared vehicles for commute.
“It’s hard to put an exact figure to this because we operate in a ‘shadow’ market that hasn't been researched much, but if you were to look at the number of registered vehicles in Bengaluru, it is 22 lakh, and our penetration is two lakh. We currently have about a 9% market share of car owners who have used DriveU,” says Ashok.
Speaking about the business model, he explains, “We charge customers a base fee plus any additional used kms or minutes, and from that, we keep about 20% and give our drivers 80%. In addition to this, we also provide drivers performance incentives if they hit certain daily and/or weekly targets.”
For a four-hour trip, DriveU charges Rs 429, and for one hour, it is Rs 129, and then it charges a prorated charge per min after a selected package. It also offers after-party drops for a flat Rs 529 and commutes to/from office for Rs 259.
For other services like doorstep carwash, car servicing, and denting and painting, it charges between Rs 499 to Rs 3,999.
“Over the course of the next year, we'll be focused on growing our core driver service market share in cities with less brand awareness, as well as expanding our new verticals into all markets in which we operate,” says Ashok.
“In addition to this, we're experimenting with launching an array of driver service offerings such as DriveU Plus, which is a premium tier of drivers on hire; DriveU EV; and DriveU daily that allows users to book the same driver for multiple days. Furthermore, DriveU's doorstep car wash will see a complete revamp and additional specialised service offerings to definitively make DriveU the UrbanCompany for car ownership,” he adds.
(The story was updated to change the investor name from Unitus Capital to Unitus Venture)
Edited by Megha Reddy