Yellow and black

cabs..

Current facts regarding transport

Y&B Cabs facts and figures

Porter’s Five Forces Analysis

PEST Analysis

SWOT Analysis

Overview of the presentation

Current Facts

• Buses• Buses take up over 90% of public transport in Indian cities • Services are mostly run by state government owned

transport corporations • New initiatives like Bus Rapid Transit (BRT) systems and air

conditioned buses have been taken by the various state

government to improve the bus public transport systems

Public Transport in India

• Rail• The rail network traverses through the length and breadth of

the country, covering 6,909 stations over a total route length of around 63,465 km

• Transporting over 18 million passengers and more than 2

million tonnes of freight daily • The Mumbai Suburban Railway which began services in

Mumbai in 1867, transports 6.3 million passengers daily and

has the highest passenger density in the world

Public Transport in India

• Auto Rickshaw

• Characterised by a small cabin for the driver in the front and a seat for passengers in the rear

• There are total 2,46,458 auto rickshaws in Mumbai as of 2008

Public Transport in India

• Automobile• Private vehicles account for 30% of the total transport

demand in urban areas of India • The number of automobiles produced in India rose from 63

lakh (6.3 million) in 2002-03 to 1.1 crore (11.2 million) in 2008-09

• India still has a very low rate of car ownership• Low price cars introduced

Public Transport in India

• Taxicab• In India, most taxicabs, especially those in Delhi and Mumbai,

have distinctive black and yellow color.• Taxis and all other commercial vehicles have a yellow number

plate so charging taxes and toll in highways is easier for the officials.

• Taxicabs in India are mostly Premier Padmini or Hindustan Ambassador cars but newer ones are mostly Tata Indigo /Maruti Alto

Public Transport in India

• Mumbai has a population of 1.9 million. 88% of commuters in Mumbai use public transport mainly suburban trains as a means of transport

• The public transport is overcrowded and does not offer point to point service

• Most of Mumbai’s arterial roads are congested • Improvement has been taking place in the train and bus

systems through public investment • But very little attention has been paid towards improving the

intermediate modes i.e. the taxis

Background of Mumbai traffic

• 5% of the commuters in Mumbai use taxis • About 55,000 taxis ply on Mumbai roads • There are 54,524 taxi permits • 2,32,002 drivers hold Taxi Driver’s Badge (Billa) which

authorizes them to drive a taxi

• Issue of new permits has been frozen since November 1997

Existing scenario of taxis in Mumbai

Taxis in Mumbai

• The black and yellow Fiat taxis in Mumbai, are integral part of the city's heritage

• Radio cab services have been introduced• These taxis are brand new, air-conditioned cars, fitted with

GPS and electronic meters • Presently operated mainly by three companies: Meru (Green

Silver), Gold cabs (Yellow Red) and Mega cabs (Black)

• The radio cab business operates on a unique business model

• This cabs are provided with GPS, MDT system• When a customer dials the call centre of a radio cab

from, the operator locates vehicles that are closest to the caller and seeks the driver’s response. Once a driver confirms with a ‘bid’, the vehicle’s number is flashed back to the customer

• Radio cab firms operate on a 24x7 basis.

How radio cabs operate?

• The system of franchises is making the radio cab business more popular

• Meru in Mumbai has already got many cabbies to transfer their licenses to the company and operate new vehicles under a profit-sharing scheme

How radio cabs operate?

Fleet Management

• Radio cabs constitute just about 8% of the four lakh registered taxis in the country. With a maximum fare difference of Rs 5/km with regular taxis, these cars that come equipped with GPS systems offer good value for customers

• The next decade will see about 450,000 taxis and auto-rickshaws being replaced in major Indian cities, presenting an over US$2 billion opportunity for the radio cab business

• Increased efficiency• The radio cab business has tremendous potential for

growth in India as the transport needs of the corporate world and even of middle-class and affluent will be met efficiently

• With Enormous parking problems, many residents would prefer to call up – or SMS

Why go the radio cab route

• Driver (subscriber) cruises around the city• Customer dials the call centre of the cab firm • Operator locates vehicle closest to caller via

GPS and seeks drivers response• Once the driver ‘Bids’ the vehicle number is

flashed back to the customer• Also plan to install equipment to accept credit

or debit cards

Business model efficiency

• New entrants are aggressively replacing the existing Black & Yellow cabs

• Capital Intensive Business• State Government support-State governments are

keen to issue licenses to operators of radio cabs.• The High court recently endorsed a move by the

state government to phase out 7,000 yellow-and-black taxis that have been on the roads for more than 25 years

• Blue arrow and Bangladesh based reliance cab are prospective entrants

Threat of New Entrants

• Other modes of public transport like Railways (local) , buses, Auto has always being a substitute to the cab market

• Low cost autos are biggest substitutes• Personal transport (EMI options, low price

Cars) • Metro and Monorail

Threat of substitutes

Competitive Rivalry

• Intense competitive rivalry• Many Private players• Technologically superior competition• Franchisee system• New business models being adopted fast by

competitors• Government support to private players for

technologically superior and environment friendly

• Medium• Plethora of options for mode of transport• Intense price wars between competitors

Bargaining power of buyers

• Low• The linkages of this business to the rest of

the automobile sector are unparalleled. Automakers are obviously eager that radio cab feet operators select their vehicles.

• Power of bargaining on technological devices• Car Manufacturers• EMI options on bulk purchase

Bargaining power of suppliers

Threat of New Entrants(HIGH)

Competitive Rivalry(HIGH)

Threat of Substitutes(MODERATE)

Bargaining power of suppliers

(LOW)

Bargaining power of buyers

(MODERATE)

STRENGTHS

• Already available biggest fleet size and permits• Reliable mode of transport• At airports vicinity black and yellows are only

allowed thus increase efficiency and transparency• Emotional Connect with customers• Effective complaint redressal procedure• Lost & Found facility• Fare rates

WEAKNESS

• 15 year domicile role for new permit applicants• Most cabs more than 25 years old (which were

emphasized to be phased out)• Old cab drivers selling permits to fleet operators• Current state of the taxis is shoddy• Transparency• Refusal of fare• Lack of professionalism• Not enough attention on safety and security of

customers

OPPORTUNITY

• Easily availability of finance• Cab-Advertising• Car-pooling• Parking Problems• Changing lifestyle, people don’t want troubles

of driving, want more comfort

• Government supporting private operators of radio cabs

• Rising fuel prices• High court endorsed move by state

government to phase out 7000 yellow and blacks (<25 years old)

• Less interested drivers• Improvement has been taking place in the

train and bus systems through public investment

THREATS

POLITICAL & Economic FACTORS

Social and Technological Factors

Objective

•To develop a new business model for the yellow and black taxis competent enough for them to fight the private players like Meru, Mega cabs•To frame marketing strategies for them in terms of branding, advertising, other forms of communication

Thank You