The good news is that we now have competition

By November 24, 2014 About, Autos 6 Comments
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“First they ignore you, then they ridicule you, then they fight you, and then you win.” – Mahatma Gandhi

It’s been a busy week. On Monday, Olacabs released their auto service beta in Bangalore. On Wednesday we got confirmation that Ola’s biggest Indian competitor would follow suit. On Thursday Uber announced the launch of Uber Go (India-specific vehicle class 15-20% cheaper than Uber X). In short, the hot category mGaadi’s operating in had become super hot.

Friends, partners, and tweeple have been wondering what all this means for mGaadi. Short answer? This is GOOD NEWS! For the longer answer, you’ll have to read the rest of this post.

Where and how it all began

In late Aug 2012, S first pitched the idea of mGaadi to V. Mission? To dramatically improve the livelihoods of auto rickshaw drivers. How? By creating an Uber-like location-based service for auto rickshaw commuters and using customer ratings as a lynchpin to reward and retain the best drivers. V was hooked and they decided to startup. A few months later, S and V had moved into mGaadi’s first office in Domlur and soon thereafter hired their first engineer (the peerless Kiran Raj). In mid-2013 we did a controlled pilot that would set the stage for the public launch of the mGaadi service.

Where we are now

When we launched on Dec 11, 2013, we had 500 drivers! We doubled in 2 months. Doubled again 3 months later. Doubled again in ONE month. And doubled again to 8,000 by Sep 2014. It won’t be long before we breach 10,000 and not too much longer before we double that number. In the early months, we were quite terrible in fulfilling trip requests. Commuters who got an auto loved us. Not surprisingly, the ones who didn’t (or got stood up last-minute) hated us. Gradually, as we increased overall supply AND we started collecting driver locations more efficiently AND the initial driver ratings reached a critical mass for our trip matching algorithms AND after key process changes, fulfillment rate started climbing. Our repeat customer metrics started increasing… week after week after week.

The number of GPS drivers in the mGaadi network is rapidly increasing and (guess what) our best is STILL to come!

Competition and the great volte face

Funny how things change in a short timeframe. Ola Mini was launched with much fanfare in February to compete with auto rickshaws in Bangalore. Seven months later, they raised the ante. The Mini would cost commuters a mere Rs. 10/km, cheaper than rickshaws. The radio jingles and email campaigns pillorying auto drivers became shriller. Uber’s email campaigns were no different. Why would YOU (stupid commuter) pay Rs. 13/km for an auto rickshaw when you can get cheaper A/C cabs? There was just ONE tiny problem – they could not build supply fast enough! So last week was seminal because:

  • Ola CEO tweeted this: “Cabs are not a replacement to autos. Both will coexist and grow!” and
  • Uber CEO (at a global fundraising drive in New York) shared his plan to use rickshaws to shuttle around passengers in India

India has over 5 million auto rickshaws and they aren’t disappearing overnight. The solution is not to ‘vanquish’ or ‘exterminate’ them but to organize them better. We welcome Ola and Uber in joining us in this endeavor.

Caught napping?

Some friends have suggested that we were caught napping. Hardly. We’ve known for over a month that Ola would be launching an auto service in Bangalore. Yeah – drivers are a talkative bunch and the auto drivers are even more so. We’ve also known that the mechanics of the Ola Auto service would mirror mGaadi (meter + Rs. 10). We’ve also known that the cab model (of forcing the driver to undertake any trip) would not work in the case of auto rickshaws. The Ola auto offering validates the mGaadi model.

So why is this GOOD news for mGaadi?

We’ll start with a quote, “Flipkart had its fastest growth after Amazon entered the market and started competing!”

Competition (especially the entrenched heavily-funded kind) forces you to be smarter, more focused and execute like a sharpshooter.

We are huge fans of Jeff Bezos and will invoke one of his more famous quotes “We don’t obsess about our competition. We obsess about our customers”. We have two sets of customers – commuters and auto rickshaw drivers and we’ll continue to obsess about them and, of course, keep an eye on the evolving competition.

Oh! one more thing… every single member of mGaadi punches way above his/her weight.

Let the games begin.

– Solomon and Vishy

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