Pune based Autowale, an on call rickshaw service, recently launched a pilot in Bangalore and pulled back after a while, raising doubts about the viability of dial-a-rikshaw in the country. One can’t blame bystanders for being sceptic as most such attempts have failed in the past. Somehow Autowale seems to have survived so far. The startup has served more than 75,000 customers and has worked with over 1000 workers. The angel backed company has been profitable for the last 6 months and is targeting operational break-even by next month. We reached out to the team to learn what they are doing right. Janardan Prasad, the COO of Autowale shared insights and details that give us an inside look into the business.
First, lets take a look at the market.
Dial-a-rickshaw business in India
Auto-Rickshaw acts as a backbone of Urban Commute serving between 10 and 20 percent of Indian Commute
Millions of passengers and drivers are part of this Multi-Billion Dollar industry in India.
Tier 1 Cities have 50-100K auto-rickshaws and Tier-2 have around 15-30K rickshaws each
Most of the attempts with Dial-A-Rickshaw, have failed in various cities, except for G-Auto (Charitable Trust by IIM A alumni) and Autowale (Private Ltd company by IIT K alumni)
How Autowale is Different?
Juggling Business Model: We kept trying various models depending on Customer Demand, Driver Acceptance, and Investor Support. All three things may not be available simultaneously in early stage, so entrepreneurs should keep juggling based on situation. Most of the other dial-a-rickshaw companies betted heavily on one Business Model and certain assumptions.
Own Risk & Share Rewards: To gain Rickshaw driver’s confidence in early days, we bought their miles and took the risk on Business while drivers were rewarded irrespective of demand; This helped us grow from fleet of 5 to 400 quickly. This also helped in gaining customer confidence that helped us attract 100K+ Customer. After we gained initial confidence we started sharing the risk and rewards with Rickshaw Drivers.
Expand & Experiment: Just to validate that the problem and solution is not geography specific, company did a pilot in Bangalore and validated demand and supply in another city as well. This pilot would help us scale in other cities when we will expand in near future. Autowale did the only acquisition in this Industry by acquiring AyAuto (another Dial-a-Rickshaw company in Pune that did pretty well in building demand and supply for Dial-a-rickshaw).
Stay focussed… in early stage: (at both domain and geography). People encouraged us to enter cabs, but we are focussed on Rickshaws as this market opportunity is huge. We may try alternate sources of revenue later, but not in early stages.
Step Back… if its logical: After successful pilot in B’lore, we decided not to launch it commercially in B’lore and stayed focussed on Pune profitability. It was tough not to get carried away with customer and driver response that we got in B’lore.
Social Network… & Media network: We realized pretty early in Pune and then in Bangalore that we get more traction from print/electronic media than social media. Prioritizing customer monetization and driver engagement over Facebook traction, helped business stay focused in its early stage. Moment we realized that very few Facebook likes are converting to paying customers for Autowale, we stopped focussing on our Facebook page. However we still encourage our customers to give feedback and suggestions online.
Slim Model… survives longer: After burning at very high rate initially to gain customer and driver traction, company went quite lean this year and cruised through the road of profitability and sustainability. We always see funding as last and important piece of jig-saw puzzle, before we move to next level.
Recommended Read: Can AutoWale be the Meru of Rickshaws? [Review]