Wednesday, December 17, 2014

TaxiForSure's Nano Cabs in Bangalore - Reviewed

Yesterday night I traveled in TaxiForSure's elusive Nano cab. I must say I was mighty impressed by the car! I shall post a brief review of my experience and the information I gathered from chats with the cabbie here.

Note: This shall be one of many posts describing my travel experiences via cab hailing mobile apps in Bangalore.

Update: See last section for how things are nearly an year after launch




Booking

TaxiForSure's app I shall describe in a later blog post. But for now I'll focus on numbers alone. Ola has a fleet of around 8500 cabs served under the "Ola Mini" banner and I found them usable, but occasionally hard to come by. Compare this to TaxiForSure's launch numbers of 100 cabs. Yes, 100. Their Nano fleet is so small that it is very rare to come across these cars at all. I first saw a TaxiForSure Nano while strolling through Koramangala last Saturday (2014-12-13). Yesterday was when I finally bagged one to pick me up, and this was because I was working from a cafe and had no specific time in mind to leave and was checking my app periodically if there are any cabs around. Bottomline: Think of being able to get a Nano for picking you up as a lottery. Either you get lucky and travel cheap, or you fork over some extra cash and travel in a regular cab.

Pricing

This shouldn't be the only reason to sit in a Nano Taxi (see the next section) but I need to mention how cheap this option really is. TaxiForSure charges Rs. 25 for the first 2 kilometers (12.5/km) and then Rs. 10 for each additional kilometer. No extra charges for night time travel or peak hour travel.

The Car

I've always been appreciative of the Nano. I was heartbroken to see it bomb in the market due to bad marketing by Tata (who labeled it as a "cheap car" instead of a "smart car"). Looks adorable, has a rear engine, rear wheel drive layout (like a Porsche 911, Smart Fortwo and the original Volkswagen Beetle - all amazing cars in their own right) and is tiny. Its turning radius is meant to be seen to be believed. But this was the first time I was actually IN the car.

Things I was blown away by

  • Rear legroom rivaled the Tata Indica. More than sufficient for most people.
  • Front legroom was comparable to a large SUV. This was because there is no engine at the front and your leg stretches forward into free space.
  • The front seat height is SUV-like. Much taller than most cars. This gives a good view of the road and feels nice if you have longer feet.
  • The AC is a chiller. It was not even in its top speed and I was shivering.
  • The suspension was neat! It soaked up all the bumps nicely and did not throw any tantrums.
  • The turning radius and the overall "narrowness" of the car. It could take detours through the tiny streets of Bangalore like none else.

What could be improved

  • Under-thigh support. The reason there seems to be a lot of legroom is that the seats are shorter (i.e, don't project forward a lot) and higher. But it seemed like a reasonable compromise.
  • The music system - while it had all the basic features - 4 speakers, USB, CD, AUX-in, radio, etc, it wasn't exactly the sort of system you could enjoy psychedelic rock in. You need to use thee AUX input and tweak the EQ on the phone to get the balance right.
  • Crumple zones (or the apparent lack of them). There is hardly any space between the rear passenger and the rear end of the vehicle, likewise for the front. The doors are also really thin and due to the narrowness of the vehicle you sit quite close to the door. While the Nano is safer than a bike and a three wheeler and perhaps future Indian quadricycles, it isn't safer than much else when it comes to vehicles that are classified as a "car" in India (except possibly a Datsun Go).
  • The rear seat belts were taken down from a brand new car. Shame on you TaxiForSure. Isn't passenger safety even slightly important ? This isn't Tata's fault, so no points deducted from the Nano itself.
  • Funny squeaky sounds from somewhere in the car's front. These shouldn't be present on a new car which has not even had its first service.

Business Model

The driver mentioned that Tata offered TaxiForSure a huge discount (and are probably selling the car at a loss) - 140k INR instead of the usual 240k for ex-showroom - and this offer ended on 15th December, 2014. While the launch was 100 cabs, there are around 500 delivered so far and the total booking (expected to be realized by Jan 2015) currently stood at 3000 Nanos for Bangalore.

TaxiForSure seems to have gone with the ownership model (like Meru) instead of their regular aggregator model (like Ola) here. They own the vehicles. Drivers are expected to stay logged into the app for 12 hours a day, 25 days a month to earn Rs. 20,000 in pay. For each additional hour over the 12 hours, a driver earns Rs. 150.This seems slightly modest compared to the numerous incentives self-driven cabbies get.

The cost of operation is roughly Rs. 5/kilometer for the Nano Twist taking fuel efficiency, servicing and resale into account. So with a profit of Rs. 5/kilometer (at the billing amount of Rs. 10/km) TaxiForSure needs to run 160 kilometers in a 12 hour day to afford to be able to pay 20,000 rupees a month to drivers and break even. Seems doable to me. At 200km/day they'll be making a profit of 5000 rupees per cab per month. However, the 150 rupees bonus for an extra hour seems loss making, as the average distance covered in an hour in Bangalore is 20 kilometers equating to a profit of 100 rupees - 150 rupees bonus results in a 50 rupee loss.

Overall, I don't expect the fares to stay this low if the company hopes to stay profitable. They can probably jack up the prices by atleast a rupee or two per kilometer and still have happy customers. But since most of these VC-funded taxi app companies in India are busy burning money to destroy each other until the richest survives, I don't think cost is a concern at the moment for TaxiForSure. But unlike in the aggregator model where the incentives offered resulted in a sure-shot loss for the company, with Nano cabs they have a chance to make some real profit. I hope other companies replicate the model here. Bangalore could do with a fleet of Nanos ferrying people around for prices similar (or better, lower) to those charged by an autorickshaw.

What's in it for Tata ?

The driver mentioned that a lot of customers were first-time Nano travelers and had positive experiences (my positive experience went as far as making me write this blog post!). Some even went as far as asking him recommendations of which color Nano to buy for themselves.

Personally, I was mighty impressed what a car priced around 300,000 INR onroad (for the passenger version) can offer and I can certainly recommend this to those looking for a smart city car to potter around in.

Tata may have screwed things up with marketing the Nano, but this seems to be an interesting strategy to get back in the game. By letting people experience the top-end Nano model as a taxi (and at a discount so that Taxi companies consider them) they are exposing the car to fresh customers. I hope this pays off and the Nano sells in numbers it deserves to sell.

Update: 2015-11-18

A lot has changed since this blog post. Here is a quick summary of what happened:
  1. TaxiForSure got acquired by Ola.
  2. The prices were significantly jacked up - 25 base, 10 rupees a kilometer and then 1.5 rupees a minute plus a 6% tax
  3. Driver owned Nanos began to appear - drivers preferred the cheaper Nano Twist XE model over the XT model.
  4. These drivers got zero incentive and had to instead shell out 15% of their earnings. Drivers claimed this was a low income business but for the company this was actually profitable.
  5. Availability started improving (due to the new prices obviously)
  6. TaxiForSure finally reduced their prices in November 2015 to 5 rupees a kilometer and increased the base fare to 35 rupees.
  7. Prices are now competitive with UberGo and in empty road conditions the cheapest cabs on Bangalore roads once again.
  8. Availability is still near-zero
  9. I expect these to become a lot more profitable when the CNG models start plying as taxicabs in Mumbai

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