[FlyingSpur]

Originally Posted by TheARUN

This thread has been a very educational read.

One point I'm surprised that nobody made was, nobody is forcing the Drivers to agree to the terms. They are getting in at their own risk or because of circumstances. Hence, they better be prepared for what is in store for them.

EXACTLY the point my dad made when I was discussing this thread with him

[Mpower]

Originally Posted by tazmaan

the cab company and cab company pays for fuel and maintenance.
4. The meter prints a detailed report after each shift which gives details on how many kms you have driven with meter on and without meter on, Average Speed , top speed, idle time etc. It then calculates What money you have made and what money you should have made for that average. It gets very hard to cheat. It gives you a room of 15% at the most.

Great infor Taz. How much is the daily rental for the cab.
How do they deal with this scenario?
The driver can decide to pick up someone without using the meter (cash )and then claim they were running empty looking for a customer.

Originally Posted by DRC

Nice thread here!
Sad to know such a good service operates on so thin margins. But again, it ensures only the hardworking and committed manage to survive the model.
Otherwise I think this will go the auto rikshaw way. Too low operating costs leading to saturated market to bad service. No one in bangalore could get the auto guys to behave and hire to the destination you ask for.

Auto guys are lousy because they have no competetion. Their fare was based on petrol and then they switched to CNG. Now they are raking in the moolah.

Originally Posted by arunmur

From the charges on the car it looks like they charge about 2.5L every year from the cabbie. In four years its 10L.

So you pay 10L for a 6.5L logan.

And if I am not wrong CV's loans are at 3.5% p.a. ?

you forgot about the cost to run the call center and the fee paid to the airports.

Originally Posted by anekho

Guys, whenever possible leave a tip, it may go a long way.

Long way towards what? ....ensuring that they dont crash the car and kill us???

First of all they ARE making good money.
Seocondly they work so hard because the money is GOOD....not because the money is bad.
If the money was bad, there would be no takers for the cabs in the 1st place.
Thirdly, the more money they are making..they will try to make even more(ie push the limits by not getting sleep etc). so that does'nt help your safety.
IMO tipping should be done only when the driver goes above and beyond the call of duty. Like waiting for you when you are delayed. or coming to a far off destination, excess luggage or something like that.

Check out the psp's analysis and you will realize they make double or triple of what a private driver makes.

Originally Posted by black12rr

950 per day , even on sundays and festivals ? . Thats little too much .
What happens when there is heavy floods and curfew ?

Its called fixed cost. part of doing business.
when there is a curfew everybody from paanwala to sabziwala loses money

Originally Posted by black12rr

950 per day , even on sundays and festivals ? . Thats little too much ?

I dont see whats stopping them from having a partner who will drive the cab under his name.

Originally Posted by 1100D

One of the biggest grouse for cabs in Kolkata is refusal to go a destination, it remains even with the radio taxi, only the explanation is given with a velvety feel.

Great point 1100D. I think govt should make a law that if you want a damn license, then cab should take you anywhere within city limits when you flag it down. BUt of course, the call center people can always lie...dunno how to get around that.

Originally Posted by Spitfire

For a year:

They pay Meru:
950 x 365 == 346750

Lets assume they cover 100000 kms in a year.

They get: 1400000
Or else its a great business model beneficial to both parties.

You are assuming that every km travelled has a fare. I think they spend 50% of the time and kms driving around empty getting to a customer or looking for one.

Originally Posted by psp62in

This information is correct for Mumbai Meru.

Some additional info on the fuel/maintenence costs sharing in Mumbai:
1. Fuel cost (CNG) is compleltely borne by the driver. It works out to be roughly Rs. 1.10 to 1.20 per km.
2. The current fare structure in Mumbai is Rs. 20 at flag down (1st km) and Rs. 14 per km thereafter.
3. Normally a full tank (empty capacity is ~12 kgs but normal refill will be just about 10kg) can give about 160kms and the vehicle needs 1-2 fills on an avg day.

3. The vehicle service costs are borne by the company. Every vehicle is serviced once a month.
4. Any internal maintence work cost, including engine etc is borne by the company.
5. Any external work cost (i.e. accident related) is shared 50-50 by the driver/company after the insurance claim.
5. Assuming 60% of the daily run is with the passangers on-board, the arithmetic is as below:
Daily payment to the company = Rs. 750/-
Fuel cost (15 kgs CNG a day @ Rs 25/kg) = Rs. 375
Kms run with passanger on board (16km/kg*15kgs* 60%) = 144 km
Daily total collection = Rs. 2016
Net to the driver after fuel and payment to the company = Rs. 891/- (i.e. Rs 22K per month assuming 25 working days).
(As per my talk with some of the Meru drivers, the actual daily take-home averages in the above range).

So it is not all that bad as some of you may think.
I feel this is reasonable considering that it benefits the three parties, viz. The company, the driver, and the customer.

Perfect analysis psp. That is indeed good money. Private drivers make 5-7K per month for a typical 8 hr shift. although some of them get to sit around during the middle of the day.

But are they using CNG everywhere. I thought most were diesels. CNG means fewer places to fill up and longer lines and longer fill times.

[aby]

I think the main grouse is that 950 Rs per day is excessive for Logan. Assuming a daily run of 200km, it would mean that the car would have a useful life of 4 years. Car would have run close to 3 lakh KM in 4 years.

In that four years, Meru has to recover the cost of the car, cost of running a call center, pay for insurance and maintenance of the car. In addition to that what most of us didn't consider in the cost was the permit charges (for running it as a taxi), RTO bribes and finally commercial passenger insurance.

All in all it doesn't look like that Meru is making obscene profits. What is likely is that Meru has paid obscene money as bribes to ensure that it corners Airport contracts in almost all big cities. In cities like Bangalore there is a virtual duopoly in Airport taxi market.

[psp62in]

Originally Posted by Mpower

But are they using CNG everywhere. I thought most were diesels. CNG means fewer places to fill up and longer lines and longer fill times.

In Mumbai now there are plenty of CNG filling stations and no longer one is required to wait. Last week, we had taken my relatives car for refilling CNG, and to my surprise, we were only no.2 in the queue, it took no longer than a few minutes to refill. (I am not sure about the other Metros. but I guess it may not be as good as this).

[anujmishra]

Nothing comes easily. Monthly salary too. People get envy with people who are at the high positions but one should know to reach that position he must have did very hard work initially. By seeing their lifestyle one imagine that how much they are enjoying. But they do not know they are still doing hard work in their chores.

Even if drivers are complaining that they are not getting enough. It alll depends upon their skills, how to manage each and everything that comes on the way. Now, they have to do hard work. So, they are complaining. They must have spent their initial years just as it is. Meru or Easy just asked drivers to join with this terms and conditions. No body forced them to work. Infact Meru and Easy cabs are doing great job by generating thousands of job.

I have read in one of the post where one of the member said they usually give 50 - 60 Rs as tip to Meru Cab drivers. Why? You can spend you 50-60 to really needy people not for Meru Cab drivers. This is competitive world, If one has to survive he has to make kill. If Meru cab drivers compare their salary with Director or Manager then it not more than comedy. Everybody wants money should come to them without much hard work.

What hard work means? To understand this people should see how Japanese and Koreans work. That is called real HARD WORK. Not which Meru Cab drivers doing.

[AkMar]

This is a very interesting and informative thread! Just one query: Who gets the revenue generates form ads pasted on the cabs? Is it shared 50-50 between the drivers and the cab company?

[FlyingSpur]

Originally Posted by AkMar

This is a very interesting and informative thread! Just one query: Who gets the revenue generates form ads pasted on the cabs? Is it shared 50-50 between the drivers and the cab company?

I'm pretty sure it's just the cab company, although I don't know this 100%.

[anujmishra]

Originally Posted by AkMar

This is a very interesting and informative thread! Just one query: Who gets the revenue generates form ads pasted on the cabs? Is it shared 50-50 between the drivers and the cab company?

What kind of Ads? I did'n see any. If it is there, it should ho the cab company. As it is their brand which is selling in market.

[rove_drives]

While everyone is decyphering business models of Meru and Easy cabs, one thing is for sure - consumers are getting much better services.

Meru and Easy cabs have a fleet of cabs not older than 2 years. It was all fresh purchase. At least in Hyderabad, its all logan and well maintained.

From safety - it is good. Drivers are traceable so that can't dare a crime that easily.

I have heard from many consumers that any complaint is well attended by these companies.

So all in all. Its a win win situation.
If Meru and Easy cabs are minting money on expense of drivers, then drivers are not at all either. So everyone is prospering and at the same time, consumer is happy.

Please compare it against nasty auto wallas and amby taxi wallas. They will be rude. They will charge illogically. They would take you for a ride.

[condor]

Come to think of it, Meru / Easy Cab are just re-doing the age old stuff, but at a corporate level. Many a cab / auto on the roads are actually owned by some one who rents out the vehicle to a driver. The driver pays a certain amount as a daily rent, is responsible for anything happening to it. Post any expenses - rent, cops, fuel, etc - the balance will be his day's earnings. So instead of doing things on a small scale, person-to-person model, Meru / EasyCab have stepped in, engaged their partners at a coporate level - the auto makers on one hand, and the airports etc on the other. The fillers include the GPS, a call center, & the works.

[gkoneti]

good topic. thanks for initiating it.
I am from Hyderabad and have used both Begumpet (old) and the present Shamshabad airport extensively for the past four years. Before the new airport started operations in March 2008, we used to depend mainly on auto or rented cars from various travel agencies. There were very few metered cabs like Cell Cabs before March 2008. But after the new airport came into picture, a new chapter has started in passenger commuting to and from airport. Remember, these are new international airports which are built in PPP mode (Private, Public Partnership) which means that they need to be profitable in the long run to maintain all the gloss and cleanliness. So professional cab services like Meru, Easy Cabs, Budget cars, Euro Cars have seen the light that pay a fee to the airports for becoming their "preferred" radio cabs.

But the story of Meru didn't actually start with airports as their focus of business model. If I am not wrong, Meru started its operations first in Mumbai in 2007 as an alternative (better) choice to the existing black taxis. I worked in Mumbai for short time in 2007 and used Meru cabs several times from my office in Mahalaxmi. It was breeze of fresh air travelling in Green Maruti Esteem Meru cabs compared to black taxis. Yes, Meru started its services in a Green Maruti Esteem. Daily i could see 2-3 Esteems parked before our office and when ever i had to go for a meeting, it was Meru. Many a times, the black taxi drivers used to pick up a fight with them.

My point is, cab companies like Meru and new age Green Field international airports (Like Hyderabad and Bengaluru) have jointly started a new chapter in services. These airports are at atleast 40km away from city and hence each trip would normally fetch Rs. 600 for the driver. Moreover, apart from airport preferred cabs like Meru, Easy, Budget etc other cabs are not allowed near the arrival terminal which itself is a good tactic to make passengers get used for them. When we come out of the arrival gates, you can get a large fleet of green and white Logan cars waiting for you. Other cabs have to park themselves almost 1 km farther from arrival gates and they are prohibited from entering into the arrival area.

One interesting thing is that the approach road (from the main entrance of the airport to the departure area) to Hyderabad airport itself is more than 7km and it costs more than Rs 100 just to reach the main road. clever planning.

Another interesting point is that both Hyderabad and Bengaluru airports are quite far from city (40km average) and you can not take your personal vehicles all the way to airport just to get dropped. We essentially depend on these cabs to get us to the airport. Looking at this distance factor quite a few new cab companies have emerged in the past 18 months (Since opening of new airport) in Hyderabad. They started competing on service, price, accessibility etc, Notable mentions are Dot Cabs with Innova and Indica cars, Green Cabs with exclusive Maruti 800 LPG cars, Yellow Cabs with Indica cars.

Most notable and competing cab service is from Dot Cabs. Though they are not preferred cabs at the Airport, they have large number of cars ready for passengers at the Hyderabad Airport. But how do they work? On price!!!.

From anywhere in Hyderabad to Airport, a Dot cabs Indica charges you flat Rs. 399 (with limit upto 39km and extra km at Rs. 10). Where as Innova charges are similar to Meru at Rs. 15 per Km. But anytime, an Innova is better than a Logan and you can take more luggage and more passengers can travel.

Now the most juicy part. When you want to travel from the airport to the Hyderabad city, you can just pay flat Rs. 499 for an Innova during day time and Rs. 599 during 11pm to 5am. This is huge saving compared to the Meru fare of Rs. 15 during day time and Rs. 18.75 during night. But the catch is that you have to travel little farther from the arrival gate towards parking area as these Dot cabs are not allowed to enter the arrivals.

Same is the story of Green Cabs with Maruti 800 charging Rs. 10 per km during day time and Rs. 12 at night. Meru and Easy cabs are having some tough time with these cabs. But competition is good for all. What I feel is that this is the transition time and over a period of time, the business models of these cab services would settle down and the drivers too would eventually learn the pitfalls in each model to select which one to go. But right now, I'm happy with all the cab services.

On the quality of services, I always recommend Meru. These drivers are little better trained in manners, etiquette etc. For both personal and professional travel, i have almost traveled in all of the 700 odd Meru cabs. Most of the drivers know my face and home too!!!. During the initial days, Meru and Easy cabs both used to send cabs for shorter distances also. Many times, i have used them for 6-7km distances and they never complained. I remember, Easy cabs offering a with in Hyderabad local travel at Rs. 12 per km for about 5-6 months during late 2008 to early 2009. Most of the times, it used to be cheaper than the autos.

oh well, right now, the cab companies and the drivers may not be getting good amount of profits to take home, thanks or no thanks to the slow down in economy and subsequent cautious spending by individuals and institutions, things are in tough phase. They will come out it eventually as traffic to airports get normalized.

Finally few personal observations

* Meru, Easy cabs etc have opened a new chapter in cab service industry inviting many players to compete and offering hell a lot of choice for the passengers. You can see it as a very long test marketing phase by the cab companies to crack the best mode of operating their respective business models.

* What we are seeing now is a transition phase and once they (cab companies) enter into growth phase, there will be more standards and benchmarks for the service before finally getting into a consolidation phase.

* My feeling is that the fares would eventually go up slightly to Rs. 18 to 20 per km in the next 3-4 years (or less) and these companies would be in profits. Passengers would either accommodate themselves with new fares (sufficiently cushioned with their increased salaries and increased allowances from the companies they are working for) or shift to improved (Hope!) public transport systems operating from Airports like Metro, buses, shared cabs etc.

* In the very long run, my forecast is that cab services from Airports would become limited (by competing with public transport) or controlled by some regulator because they are environmentally very inefficient. Given a very good public transport like Metro, there would be less demand for a cab service. A Metro or a bus can take large number of people than a car traveled by a one or two persons.

thanks for listening!

[GTO]

I, for one, am VERY happy with Meru Cab services. Don't remember the last time that I used a non-meru cab (not even black + yellow), found their service always prompt (though cabs not available if you call them last minute on a busy night), the cars clean and drivers courteous.

Some additional points of interest:

1. Meru also gets depreciation benefits on those cabs. Lets not overlook this factor. Either ways, if Meru is indeed making boat loads of money, I'd say its well deserved indeed. Last I checked, it's an open market, anyone is free to compete with them and Meru isn't really forcing any drivers to sign with a gun to their head.

2. It's not the car, but the brand that the driver gets. Meru has built up quite a reputation in a relatively short time. The call center operations alone are enough to keep the Meru driver happy / busy.

3. Get this : Meru is so hung up on discipline that, if a customer calls saying the cab was dirty, the driver has to pay a penalty (IIRC, 100 bucks). When was the last time you saw a dirty Meru cab?

4. In some situations, a Meru cab actually works out cheaper (airport to home). And in the others, Meru's well worth the premium (70 bucks more for a 1 hour drive from work to home in an air-conditioned clean modern car).

Services like these lead to a mass overhaul of quality in any given segment. After years of shoddy cab services, we finally have a worthy player.

[tsk13]

Quickcab in Delhi has an Indica fleet and charges Rs.9.50 or Rs.10/km. No idea about their efficiency but it's one of the cheapest here. Moreover, I think Radio Cabs in Delhi are CNG driven, Correct?

[Sudan_NFS]

This is how our company late night cab functions

Drivers are paid Rs 350 for 70 KM 6 Hours Amby and Indica RS 600 120 KM
These price are irrespective of the ownership,but they should driver for the company which has the contract.

As per the driver I spoke he said their is no/less margin of profit since its only RS 350 since the contract company takes half the amount(RS 600 paid to contractor from the company )

Though it seems to be better for cab driver, they do drive in day time too to earn more.

[maglev]

Originally Posted by tsk13

Quickcab in Delhi has an Indica fleet and charges Rs.9.50 or Rs.10/km. No idea about their efficiency but it's one of the cheapest here. Moreover, I think Radio Cabs in Delhi are CNG driven, Correct?

Yes all radio cabs in Delhi / NCR are run on CNG.