8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 1/24
FREE RIDE
INDUSTRY: OTHER SERVICES
BUSINESS SUMMARY
“Free Ride” revolves around the idea of
making transportation and travel less congested, eco friendly and one which can be
monetized. We plan to introduce a new mode of public transport – “Light Geared Bicycles” in selected pockets of certain cities which would be used by corporate employees for
travelling to and fro between the nearest subway\metro\local station and the company office.
There would be parking stations at major locations where the cycles would be locked using
magnetic locks. The company employees would be provided smart cards which would be
used to unlock the bicycles from the stand. The cycles will then be used for transportation
and later they can be parked back into other docking stations which are sprawled across the
city (or locality). The use of these cycles also earns revenue for the company. The
employees earn carbon credits (due to saving on carbon emission by avoiding normal
modes of transport), which can later be traded by the company in international markets (1
Carbon Credit currently earns 20 Euros in the market – which can be realized by the savings
of around 6 employees over a 5 km distance yearly). While earning carbon credits and being
recognized as “green organization” serves as the incentive for the companies, zero
transportation cost, congestion free, good for health ride serves as the incentives for the
employees. Another source of revenue would be the advertisements on the cycles and the
parking lots. This could form a major chunk of our revenues in future since most of our
cycles would be plying in busiest areas of the city.
BRIEF BUSINESS OVERVIEW
If you live in a large city, such as Mumbai, Delhi or Bangalore, odds are that you have faced
the acute problem of automotive congestion, especially in the areas where lots of offices are
located or the areas which are commercial hubs of the city. This is a problem faced in cities
world over. Add to it, the problems of carbon emission and excessive gasoline usage and weare sitting on a problem which is only going to take graver proportion in future. A few
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 2/24
solutions have been implemented so far, the most famous being the one introduced in
London, where one has to pay to bring in their vehicle to the downtown district. However
none of the existing solution attempts to solves the problem completely and neither have
these been very effective to say the least.
A major chunk of this traffic is caused by people going to their offices and that‟s why
congestions are prominent in the areas where you have high concentration of offices. We
believe this problem can be address if we can get these “white collar employees” to use an
alternate transport system which causes lesser congestion and greener as well. Of course
this initiative has to be driven by all the stakeholders involved which are possible only if we
can give them certain incentives to use this system. Hence both the companies and their
employees have to have certain incentives which go beyond reducing congestion on the
road.
The importance of solving the problems mentioned cannot be overstated. The way our cities
have been expanding, this problem is only going to take greater proportions if not addressed
now. The entire urban infrastructure is on the verge of collapsing thanks to the brimming
roads, and different public transport systems plying on them. The problem is not limited to
congestion; the ever increasing pollution level and depletion of natural fuels are other major
issues which need to be addressed soon. The service offered by us targets these problems
and provides other benefits which serve as a strong incentive for the company andemployees to start using this service. The companies earn carbon credits and goodwill
amongst stakeholders for encouraging their employees to use our service. To the employees
it provides a free transport arrangement, a healthier lifestyle and other fringe benefits like
being able to wade his\her way through in traffic jams. We believe that our service offering is
an answer to all the above problems and benefits in way which is both profitable and
sustainable in long terms.
Our service is called “Free Ride” which is basically a short haul hi-tech bicycle renting
service available to corporate whose employees can use this service to ply between their
office and metro station or bus stops. These cycles have gears for smooth riding and can be
picked and parked at multiple locations sprawled in an area. The service remains free for
employees. The companies earn carbon credits for their employee using this service who in
turn pay us a nominal maintenance charge and a cut in carbon credit. We also sell the
advertising space on the cycles and the parking stands which form a major source of our
revenues.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 3/24
The users are issued smart cards with RFID. This card can be swiped to release a bicycle
from docking stations. The details of the cards are verified at our central server through
GPRS network. Once a cycle is released its kilometer readings are communicated to the
server along with the details of person releasing it. After the cycles are plugged back in, the
details of the distance travelled are also communicated back to the central server. This
information is used to calculate carbon credits per smart card. The cycles have a magnetic
lock which opens only when the card is swiped at the docking station. So when a cycle is not
locked at a station you know precisely who is riding it. Any damage or loss to cycle can be
traced backed to the person using it.
There are no direct competitors to service which we provide. Though there are substitutes
but none of them come close to the benefits and value offered by our service. We have a
distinct advantage over all other public transportation system. The service has something to
offer for all the stakeholders involved directly or indirectly.
Free Ride is a futuristic project which if not taken up today will become the default option
tomorrow. Global warming is a concern which more and more countries and companies
have started taking seriously. In developed countries there has been a clear trend towards
becoming a more responsible corporate entity and the trend will catch up with the rest of
world too. Then there are problems of unhealthy life styles which almost all corporate
employees suffer from. Free Ride offers not only a healthy and environmentally friendlysolution to these issues but a win-win opportunity for every stakeholder. Each of them is
either earning or sparing money, all that in an ethical and respectful way. In a nutshell, Free
Ride is a profitable business project impacting the economy and the environment in a
sustainable way.
This business idea has the potential to be extremely successful. This is because it acts as a
Win – Win situation for all its stakeholders. The stakeholders involved for this concept are:
Corporate, Employees/Users, Government and Society. Now the Free Ride concept would
benefit them in the following ways:
Corporate: It enables the company to earn Carbon credits – something which would
become extremely important in the coming days. Moreover it is also a positive social
initiative from the company
Employees/Users: They are able to save costs, avoid road congestion and traffics. Also
bicycle riding promotes the health of the individual and is extremely helpful.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 4/24
Government: It is one of those initiatives, which when properly nurtured can take the shape
of a successful public-private partnership. The government can act as a great enabler and
this would help the state in making their area an environment friendly area.
Society: Reduction in carbon emissions would help save the environment and benefit thesociety at large.
Over and above it, this business idea is a simple yet innovative and powerful concept. It‟s
extremely beneficial and relevant for all the stakeholders and its implementation can also be
done easily. It greatly benefits the society at large and is environment friendly with huge
growth potential. Indeed once implemented properly and as prescribed by us (in a phased
manner) it can go a long way and become an unparallel mode of public transport!!!
MARKET OPPORTUNITY
TARGET MARKET SEGMENT
Our idea is to target corporate customers – those with sizeable workforces in the age
bracket of 22 years to 35 years. The idea will appeal most to companies, which have a
younger work force, as younger people will not be against the idea of riding free of charge to
work, and health. Another reason would be that the idea of a free ride would monetarily
appeal more to a young employee than to one who is in a developed and remunerative
phase of his career when financial concerns have ceased to be too troublesome. Hence, to
begin with, we will sell our services in big cities, which are employment hubs of India like
Mumbai, Bangalore, NCR and Hyderabad. Within those cities we will target firms that have
sizeable work forces in the age group of 22 to 35 yrs. However, for advertising purposes we
will approach a much wider segment.
POTENTIAL REVENUES
Our revenues will come from three different sources: from a 10% share of the sales
proceeds of Carbon Emission Reduction Certificates, from services charges for use of the
vehicles and from advertising revenues. The biggest chunk of our revenues would come
from advertising as we cannot charge the companies too much for services nor claim too big
a share of the carbon credit proceeds as that would make our service unattractive to them.
We hope to have a client base size of 30 by end of year 1 and grow it to 150 clients by end
of the 5th year. Given this we have estimated revenues of approximately Rs. 28 crores per
year by the 5th year of operations.
GEOGRAPHIES TARGETED AND EXPANSION PLANS
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 5/24
As mentioned earlier, the pilot implementation of the idea should be in major employment
hubs of India like Andheri and Churchgate in Mumbai, Electronic City in Bangalore and in the
National Capital Region (NCR). We will have our bicycle depots located at distances of 2 to
2.5 km from the companies whose employers avail of our services. We will also try to
position our depots such that they are at close proximity to the local metro station, so that
office goers who arrive at the metro station can avail of our service easily, instead of using
auto-rickshaws or other noisy and polluting modes of transport.
Initially the business will grow organically by adding to the client base of corporate
customers. We will aim at increasing the customer base by 20% every year for the first five
years. Following that we will move into other towns, which are potential employment hubs
and replicate our business model there.
Once the idea catches on and this mode of transport catches the fancy of commuters we
intend to target not just corporates but also individual customers who will be given punch
cards to avail of our services at a nominal price, far cheaper than any other mode of
transport for short distances.
BUSINESS MODEL
REVENUE MODEL
The Revenue generation for Free Ride would be done through maintaining three consistent
streams of revenue:
1. Percentage of Revenues generated from Carbon Credit Certificates (Charged to
Companies): We plan to generate revenues by charging the company a certain
percentage of revenues earned from the proceeds of Carbon Credit. Since our
company would be providing complete service beginning from managing the bicycles
for the company employees, calculating the carbon emissions saved and then
collaborating with the Carbon credit issuing organizations in order to obtain Carbon
Credit Certificates for the organization. Hence we would be charging the company a
certain percentage of the revenues earned from the proceeds of Sales of Carbon
Credits or the Market Value of Carbon Credits (in case the company plans to take a
long position on the Carbon Credits).
2. Maintenance charges for the Bicycles (Charged to Companies): We would be
charging a minuscule amount of Rs X per km travelled on the bicycles to the
companies. This would be charged to the company in order to ensure the
maintenance of the bicycles being operated.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 6/24
3. Advertising Revenues: This would be the major source of our revenues. The
advertisement would be provided to the clients on various spots in the bicycle.
Please find below the picture of the bicycle which gives us an estimate of the areas
where the advertisements can be done for the clients.
On an average, in the beginning we plan to charge the clients around Rs 6000/- per
month for all the spots on the bicycle. Going forward as the interest in the bicycles
increases, we would be able to charge a higher amount for the advertising spots on
the bicycles.
TECHNOLOGY
Technology Enabled Process Flow:
1. The employee of the company is provided a unique card issued to him by the
company (which has been issued to the company by us).
2. The employee reaches the railway station/metro and swipes the card at the cycle
stand. This swipe of the card does the following things in the database:
a. The card swipe leads to the verification of the card in the central database.
b. The card and the bike are then associated together in the database: i.e. the
company is able to track uniquely which bike has been issued to the particular
employee
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 7/24
c. Parallely, the central database currently stores the number of kilometres
travelled in the bike (when the bike has been issued to the employee).
d. Time stamp of when the bicycle has been taken out from the cycle stand.
3. Finally, after the employee has used the bike and places it back in the cycle stand,
he swipes his card in order to plug in the bike.
4. This swipe allows the database to track the following details:
a. The final reading on the number of kilometres travelled (the difference
between the initial reading on the database and the final reading gives the
distance travelled).
b. The employee who keeps the bicycle back in the parking stand.
c. The time stamp of when the bicycle is placed back in the cycle stand.
The time stamp details recorded would help in tracking cases of vandalism/damages to the
bikes. The electronic card would be a unique card for every employee. We would be
distributing these cards to all the employees of the company. The following details will be
available on the card:
a. Account Number: The account number of the company to which the money would be
billed
b. Employee Number – Company Code: In order to uniquely identify the employee and
the company.c. Validity Status: The card would have a 2 bit code to determine the validity status of
the card.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 8/24
INFRASTRUCTURE
The following infrastructure would be required in order to run the business:
Office Space and Supplies: We would need to rent/lease an office space for establishing
the office for our agency. The office supplies would include the supplies and furniture
required to run the business.
Central Database + Peripherals: This is the most vital component of infrastructure. The
Central Database would host all the information of the bicycles and the smart cards issued to
the companies. This Central Database would be connected to the technology enabled
bicycle stand and would collect information from there. The other peripherals would include
the additional computers etc that we would require to perform our analysis and run the
business.
Bicycle Carrying Truck/Lorry: We would be hiring truck/lorry for ferrying the bicycles
during the peak time in order to uniformly distribute the bicycles across the different parking
areas.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 9/24
Technology Enabled Bikes: We would be buying the geared bikes and would be fitting the
smart card enablers in them so that they can be locked in the bicycle stand and the data
from the bicycle can be transferred to the bicycle stand.
Smart Card: These are the cards which would contain vital information in them (asmentioned earlier). These cards would be provided to all the employees of the company that
avail the Free Ride service.
Networked Parking Stand: This is also a vital part of the infrastructure. This would be the
parking stands which would be connected to the central database and would pass on all the
information from the bicycles to the central database. This would help in tracking the bicycles
and also in calculating the distance travelled and the carbon credits earned subsequently.
COMPETITIVE ANALYSIS & MARKETING PLAN
GO TO MARKET STRATEGY
The company would sell three services:
1) Bike Renting
2) Advertising and
3) Facilitation of delivery of Carbon Credits (Carbon Emission Reduction Certificates)
BIKE RENTING
The service we offer involves renting of bikes to employees of our corporate customers by
positioning our bicycle stations at the doorstep of the company offices and at the exit of the
closest train or Metro station. The main selling propositions for the target customer are as
follows.
The companies will be able to earn carbon credits thanks to the kilometres covered by their
employees on bicycles instead of other carbon emitting modes of transport. On top, in terms
of image, in a world where green concern is increasing, having employees opting for
environmentally friendly transport means is an asset. Companies will be able to sell this
green positioning as part of their CSR and ethical values.
Our bikes would be far better in terms of speed, control and riding comfort for employees.
They will come equipped with gears for swift acceleration and better control and
manoeuvrability for city riding conditions. It will make negotiating traffic jams much easier.Besides, the service is free and will enable them to save the money they would spend on a
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 10/24
cab or a rickshaw every day. Riding is healthy, especially for people who spend their days
sitting in office, more pleasant than being stuck in a traffic jam, quicker when it comes to
short distance on crowded roads, and environmental friendly. Employees will have the nice
feeling of contributing positively to the survival of their planet!
ADVERTISING
We will sell advertising space on the bikes themselves and on their parking spaces. As the
parking and the bikes are situated at the subway exits and doorsteps of business centres,
our ad space will offer great visibility for ads dedicated to 18-45 years old, middle income,
skilled working people. Moreover, it gives an innovative touch to the ads transported by the
bikes throughout the town. The fact that the advertisements are being borne by an
ecologically favourable, healthy mode of transport which is trendy and attractive to look at as
well and being driven by responsible citizens en masse will carry huge appeal and will
bolster the legitimacy and credibility of the products/services advertised.
CARBON CREDITS DELIVERY FACILITATION
We will calculate the reduction in emissions due to company employees opting for our mode
of transport instead of carbon emitting modes of transport and enable the firms to get
Carbon Emission Reduction Certificates for reduction of every tonne of Carbon dioxide from
the CDM department of the United Nations Framework Convention for Climatic Change.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 11/24
Each such CER certificate sells in the spot market for 20 Euros each. The companies can
sell their carbon credits to Power utility firms and others in Europe and other Kyoto Protocol
Nations.
The proceeds from the sales of carbon credits would more than offset the services chargeswe would charge them and even allow them to reward their employees – especially the ones
who contribute most to emission reductions.
BIKE RENTING & CARBON CREDITS
SALES CHANNELS STRATEGY AND SALES TARGETS
We intend to build a sales team of in-house sales representatives to showcase the
entrepreneurial spirit of the company while getting in touch with potential customers.
There will be one salesman in each of the targeted city, whose main task will be to get in
touch with companies, visit them several times, close the deal and sign the contracts with
support of one team member having a legal background. Each salesman will report to the
national relationship manager.
As the business grows, sales representatives will be hired to support the growth accordingly.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 12/24
Sales targets: In the first year of operations itself we intend to land 30 corporate customers,
all big firms with sizeable workforces in the age group of 22 to 35 years. We intend to have
an average of 150 employees/users from each corporate house. We also expect to grow our
customer base to 150 companies by the end of the fifth year. The following chart will show
our sales targets during the first five years from all three sources of revenue: bike renting
service charges, advertising and carbon credit sales shares:
Sales Targets (In INR)
Year 1 Year 2 Year 3 Year 4 Year 5
Number of Clients 30 60 100 130 150
Number of users (150 users per client)
per day
4500 9000 15000 19500 22500
Distance travelled per day per user 5 5 5 5 5
Total distance travelled(per annum) 5625000 1125000
0
1875000
0
2340000
0
2700000
0
Emissions reduction (kgs of Co2) 513000 1026000 1710000 2134080 2462400
Number of CERs 513 1026 1710 2134 2462
Sales proceeds (CERs)- euros 10260 20520 34200 42682 49248
Sales proceeds (CERs) in rupees 677160 1354320 2257200 2816986 3250368
Our Share of sales proceeds from CERs 67716 135432 225720 281699 325037
Service charge per bicycle per km 0 0 0 0 0
Service revenues 562500 1125000 1875000 2340000 2700000
Profit to clients 46944 93888 156480 195287 225331
Revenues from Client 630216 1260432 2100720 2621699 3025037
Revenues from advertising** 5625000
0
7500000
0
1250000
00
1625000
00
1875000
00
Total revenues 5688021
6
7626043
2
1271007
20
1651216
99
1905250
37
RISKS & CHALLENGES
The main risk our business will face is safety: safety of bikes on the one hand, safety of
drivers on the other in congested city riding conditions
We plan to tackle these issues by:
Inbuilt magnetically controlled lockers on the bikes to ward off thefts
Tracking individual usage of bicycles closely by means of Radio Frequency
Identifiers embedded in swipe in cards, and holding the user/parent company
responsible for damage done to bicycles due to rash riding.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 13/24
As far as mitigating accident risks is concerned, we intend to run a communication
campaign that will focus on main threats like pedestrians suddenly crossing the road,
opening of cars doors without warning, cars turning without notice etc. We plan to
send every customer private mail warning them against the road dangers in the
traffic.
The biggest challenge to the successful implementation of our plan will be drawing
commuters away from other modes of transport like auto rickshaws and cabs. We will try
and lure customers by running promotion campaigns that will highlight the benefits to health
and society as well as convenience and a welcome escape from the whimsical and at times
obnoxious auto rickshaw and cab drivers. We will also drive home the economic benefits of
the service as users will not have to pay anything to avail of it and will end up saving
transport costs to the tune of almost R. 2000/- per month.
FEASIBILITY CHECK
In order to understand how feasible this plan is, let us start off firstly by checking which can
be the major roadblocks to the feasibility of this business idea.
BAD CONDITION OF INDIAN ROADS, TOUGH TO RIDE A BICYCLE
Solution: As we have decided, this idea would be implemented in a phased manner in
certain areas of the city only. We plan to drive the bicycles only for an average distance
of 2.5 km and that also in areas where there is a high concentration of companies. In
such areas, the problem of bad roads is not prevalent and hence people are not required
to drive on bad road conditions. For example the areas where we plan to implement this,
don‟t face the problem of bad roads i.e. from Churchgate railway station to the Marine
drive area; Brigade road area in Bangalore; Connaught place area in Delhi etc
HOW TO MOTIVATE COMPANY EMPLOYEES TO RIDE THE BIKE?
Solution: The motivation for the employees would be as follows:
i. Employees currently spend some money for transportation from the metro
stations to their employer‟s office. Now when we implement this service, it would
be offered to these employees free of cost.
ii. Since the company stands to earn from the proceeds of the carbon credits hence
we would be working along with the company to incentivize the employees
towards using this new mode of transport
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 14/24
iii. With the use of a bicycle the employees would be able to easily negotiate
amongst the heavy traffic and would be able to save on precious time. The
possibility of getting caught up regularly in traffic jams would be nullified.
iv. A new mode of transportation which promotes the environmental cause and goes
ahead in making a green world.
HOW TO CONVINCE THE COMPANY TO ENGAGE OUR SERVICES?
Solution: For the company this is an excellent proposition and we believe the
companies would be extremely willing to accept our services.
i. An Excellent source of constant revenues for the company through Carbon
Credits. The value of 1 carbon credit in today‟s market is around 22 euros and
going forward, with the environmental concerns on a steep rise, Carbon credits
would become extremely important.
ii. An Excellent Corporate Social Responsibility, this would be one of the most
tangible steps in reducing the carbon emissions and making the world a safer
place.
iii. Positive PR for the company as the “Going Green” initiative would be positively
acknowledged in the media.
iv. Lastly, even in terms of our charges we are not charging the company any money
for providing this service (the whole service being run fully by us) apart from a
minuscule bicycle maintenance charges. The share in Carbon Credit revenue
would only be taken from the company once we earn them those Carbon Credits.
PROBLEM OF CALCULATING, AUTHENTICATING AND COORDINATING WITH
THE CARBON CREDIT PROVIDING AGENCY
Solution: Before we provide these services to the companies, we would be getting in
touch with the Carbon credit agencies. From the extensive secondary research that we
have conducted, the methodology and process adopted by us for calculating Carbon
credits is accurate and viable. Nevertheless we would enter into an accredited MOU with
a Carbon Credit agency.
FINDING PARKING SPACE
Solution: In terms of finding parking space, we need to ensure that we get parking
space at two areas: Outside Metro stations and Company premises.
In case of company premises, we should be able to find parking space within the
company premises or in the area adjacent to the company premises as in when
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 15/24
companies are housed together in a complex there are always common parking spaces
available.
For the area around metro stations, we would approach the state government in order to
get a leased area at competitive rates. Since the government also stands to gain from agreener state, the government willingness to provide support would be higher.
OPERATIONAL HASSLES – MANAGING SERVICE IN PEAK HOURS
Solution: Maintain wagons which would ferry the bikes from the overloaded areas to the
empty bicycle stand in order to minimize the waiting time of people. This service would
be used during peak hours.
TAKING CARE OF VANDALISM AND THEFT OF BICYCLES
Solution: Using technology to secure the bicycles in the bicycle stand so that they can
only be removed through the use of smart cards. Also forced removal of the bicycle from
the stand would lead to the triggering of alarm in the vicinity. We can also hire a few
people for security at the metros.
HOW TO ENSURE COMFORT FOR EMPLOYEES WHILE RIDING THE BICYCLE?
Solution: The Bicycles would be advanced bicycles with gears in them. The gears would
help in minimizing the effort of the bicycle ride. Moreover there would be a cycle cart
provided in the front of the bicycle in order to unload stuff of the employees while they
travel.
MARKETING PLAN ON-LINE / OFF-LINE
Our marketing campaign focuses on creating interest and increasing awareness at local
level. No need to spend money advertising at national level but rather targeting specific
business areas.
The brand image must spread the ideas of dynamism, youth, health and trendiness. The
bikes, colourful and all similar, will be easily noticeable on the roads. They will be the best
media of the brand image.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 16/24
ON-LINE
In order to raise interest for our project among potential users and business partners, we will
launch a buzz marketing campaign, 4 weeks before the use of the first bikes with short
movies on youtube, dailymotions etc with silhouette of a man or a woman, filmed from back
cycling.
Concept week 1: I look at you night and day on your way to office.
Concept week 2: I am fancy, healthy and will make you feel better.
Concept week 3: What about meeting me?
Concept week 4: Ready for a ride for a better world tomorrow?
We would create a website with a clear and entertaining presentation of the concept,
targeting potential users and employers. Aim of the website would be to provide information
to people having heard about the project and selling both bike renting and advertising
services.
OFF-LINE
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 17/24
Off-line marketing will be concentrated on prints (billboards), radio, a launching event and
direct mailing.
BEFORE THE PROJECT LAUNCH
In order to raise interest, we plan to set up a communication campaign in line with the online
buzz, using the same concept, with billboards situated in the business areas and especially
inside and at the exit of the main subway and train stations leading to these areas.
LAUNCH
For the inauguration, we plan to organise a cycling marathon in order to get press releases
in the targeted towns‟ newspapers and magazines. To proceed, we will provide bikes for the
first subscribers and invite people to join with theirs. Getting the involvement of celebrities
willing to show their environment friendliness would definitely be an asset.
AFTER THE LAUNCH
A more classical communication campaign, using both local radios and prints on the bikes
themselves, will be implemented later on in order to raise awareness about the concept and
providing a contact number / website address.
Then, the best advertising mean will be the bikes themselves, noticeable at the main spotsof the business areas and transports hubs.
Besides, we plan to launch a direct mailing campaign.
The first one would be targeting companies‟ top management directly, explaining the assets
of our business and providing full information regarding carbon credits and bikes renting.
The second one would support our advertising service. It would target marketing services of
many companies and media agencies in order to offer them the opportunity to advertise on
our bikes.
EXISTING AND POTENTIAL COMPETITION / COMPETITIVE ADVANTAGE
As bike renting and carbon credits facilitator , Free Ride is the first service existing as such in
India. Consequently, there are no direct competitors, but substitutes only, offering a similar
service: transportation.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 18/24
Taxis, rickshaws, companies‟ private buses and public transports. The competitive
advantages that „Free Ride‟ has are as follows:
1) Its free for those who will be the actual users and will be economically viable for the
employers as well as their services charge expenses will be more than offset by
sales of Carbon Emission Reduction Certificates
2) The idea is Environment friendly and this feature will make it easier for us to obtain
necessary permits and even support from the local governments.
3) Healthy way of transport as it gets user some much needed exercise.
4) Quicker in traffic jams than motorised transportation
5) Easy to ride, faster, more manoeuvrable, more pleasant and less frustrating than
public transportation, especially over short distance in city riding conditions.
As media space, Free Ride has direct competitors such as billboards in street, on buses, in
transports means and stations, and indirect competitors such as TV, Internet, radio etc…
Still, „Free Ride‟s‟ main competitive advantage will be its image as an innovative, youthful,
dynamic and „green‟ media space, embodied by active, ecologically sensitised people
cycling throughout the business areas on their fancy bikes. Companies implementing the
bike renting system for their employees will be offered discounts on advertising fees.
The fact that the advertisements are being borne by an ecologically favourable, healthy
mode of transport which is trendy and attractive to look at as well and being driven by
responsible citizens en masse will carry huge appeal and will bolster the legitimacy and
credibility of the products/services advertised.
OPERATIONS PLAN
BICYCLE ACQUISITION AND MAINTENANCE COSTS (IN INR)
Expenses
Number of bicycles 2250 3000 5000 6500 7500
Cost of each bicycle 8000 8720 9505 10360 11293
Total cost of acquiring bicycles 18000000 6540000 19009600 15540348 11292653
Cost of Docking Station + Accompanying Tech 30600000 10200000 27200000 20400000 13600000
Historical cost of acquired bicycles 18000000 26160000 47524000 67341508 84694897
Amortised bicycle acquiring cost*** 9720000 3348000 9241920 7188070 4978531
Maintenance cost per bicycle / year**** 1500 1635 1782 1943 2117
Cost of Maintenance of bicycles 3375000 4905000 8910750 12626533 15880293
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 19/24
The major portion of the operating expenses would be taken up by the cost of acquiring the
bicycles. Each bicycle would cost Rs. 8000/- during the year of introduction and we have
factored in inflation to arrive at a cost per bicycle of Rs. 11000/- by the 5th year of
operations. We have planned to amortise the cost of acquiring the bicycles over the next five
years.
Cost of accompanying technology and docking station requirements have been estimated to
be Rs. 13600 for every bicycle. Given that we have estimated our tech and docking station
expenses as shown in the sheet above.
Maintenance of the bicycles would come next. We have assumed Rs. 1500/year to be
maintenance costs during the year of inception. This will take care of maintenance of
bicycles as well as docking stations and tech upgrades as well. Inflation has been accounted
for in arriving at the annual maintenance costs of the business.
COST OF HAULING BICYCLES BACK TO BASE (IN INR)
Year 1 Year 2 Year 3 Year 4 Year 5
Number of trucks (for
hauling bicycles)
56 75 125 163 188
Cost of leasing trucks 56250
00
7500000 12500000 16250000 18750000
Cost of running trucks to
haul bicycles
31640
63
4218750 7031250 9140625 10546875
Since the number of bicycles we have is half that of the total number of users we will have to
employ trucks to haul the bicycles back to the bases from where they can be reused. We
have assumed a carrying capacity of 40 bicycles per truck to arrive at the number of trucks
we will need to lease. Leasing costs of Rs. 400 per truck per day and running cost of Rs. 225
per truck per day, which includes fuel and manpower charges.
SALARY EXPENSES
Annual Salaries
Number Year 1 Year 2 Year 3 Year 4 Year 5
1 CEO 960000 1046400 1140576 1243228 1355118
1 Marketing and Sales 720000 784800 855432 932420.9 1016339
1 Legal Personnel - looking into CER sales 720000 784800 855432 932420.9 1016339
1 Finance 720000 784800 855432 932420.9 1016339
1 Accountant 480000 523200 570288 621613.9 677559.2
3 Sales reps 900000 981000 1069290 1165526 1270423
6 Operations team 1800000 1962000 2138580 2331052 2540847
2 Assistants 600000 654000 712860 777017.4 846949Total 6900000 7521000 8197890 8935700 9739913
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 20/24
LAND LEASING COSTS (INR)
Year 1 Year 2 Year 3 Year 4 Year 5
Land Leasing Costs 12000000 12000000 12000000 12000000 12000000
We have calculated our land needs by assuming 4 sq. feet per bicycle and multiplying that
by the number of bicycles we expect to have by 5 years time.
We have estimated lease cost of land per square foot to be Rs. 400. Thus we have arrived
at our land leasing costs.
TOTAL OPERATING EXPENSES
Maintenance cost per bicycle /
year****
1500 1635 1782 1943 2117
Cost of Maintenance of bicycles 3375000 4905000 8910750 12626533 15880293
Number of trucks (for hauling bicycles) 56 75 125 163 188
Cost of leasing trucks 5625000 7500000 12500000 16250000 18750000
Cost of running trucks to haul bicycles 3164063 4218750 7031250 9140625 10546875
Salary expenses 6900000 7521000 8197890 8935700 9739913
Selling and General Expenses 2275209 3050417 5084029 6604868 7621001Land Leasing Costs 12000000 12000000 12000000 12000000 12000000
Operating Expenses 33339271 39195167 53723919 65557726 74538083
FINANCIAL PROJECTIONS
For our business plan we have estimated revenues for a period of 5 years from inception.
The idea is to target major corporate customers first and later on, when the idea and its
underlying usefulness to health, society, environment and finances catch on, expand
operations so as to encompass opportunities provided by individual consumers.
Since our pilot operation will be executed in employment hubs like Mumbai, Delhi or
Bangalore and keeping the trend towards eco-awareness among corporates, we expect to
net 30 customers in year 1. We expect to grow from that to 60, 100, 130 and 150 customers
by end of the 2nd, 3rd, 4th and 5th years.
Since most of our initial customers will be big players, we expect to have on an average of
150 employees from each organisation using our services.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 21/24
Each user is expected to travel for an average distance of 5 km per day on the bicycle.
Given these assumptions, we calculated the distances travelled on the bikes and from that
we arrived at our estimates of revenues from service charges and sales of CERs.
We have calculated carbon emission reductions from the fact that each litre or petrol burnt
produces 2.28 kgs of CO2. 1 Carbon Emission Reduction Certificate is obtained in exchange
for reduction of 1 tonne of CO2. Each CER nowadays sells in the spot market for 20 Euros.
From these facts we calculated the proceeds our client would get from sale of CERs.
We intend to charge the companies 10% of their yearly proceeds from CER sales.
We are going to levy service charges on the company at the rate of 10 p per bicycle per
kilometre. From this rate and the estimate of the total distances traversed by all the users we
have arrived at our annual revenues from service charges.
We have deliberately kept the service charges low and our percentage of revenues from
carbon credit sales capped at 10% because we intend to make our offer very attractive to
our customers by making it a marginally profitable venture for them.
As far as advertising revenues are concerned, we intend to charge Rs. 50/day per bicycle for
250 working days a year. From this and the number of bicycles we have in service we
arrived at our advertising revenue figures.
Revenue Projections
Year 1 Year 2 Year 3 Year 4 Year 5
Number of Clients 30 60 100 130 150
Number of users (150 users per
client) per day
4500 9000 15000 19500 22500
Distance travelled per day per user 5 5 5 5 5
Total distance travelled (per annum) 5625000 11250000 18750000 23400000 27000000
Emissions reduction (kgs of Co2) 513000 1026000 1710000 2134080 2462400
Number of CERs 513 1026 1710 2134 2462
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 22/24
Sales proceeds (CERs)- euros 10260 20520 34200 42682 49248
Sales proceeds (CERs) in rupees 677160 1354320 2257200 2816986 3250368
Our Share of sales proceeds from
CERs
67716 135432 225720 281699 325037
Service charge per bicycle per km 0 0 0 0 0
Service revenues 562500 1125000 1875000 2340000 2700000
Profit to clients 46944 93888 156480 195287 225331
Revenues from Client 630216 1260432 2100720 2621699 3025037
Revenues from advertising** 56250000 75000000 125000000 162500000 18750000
0
Total revenues 56880216 76260432 127100720 165121699 19052503
7
CAPITAL EXPENDITUREYear 1 Year 2 Year 3 Year 4 Year 5
Cost of acquiring Bicycles 18000000 6540000 19009600 15540348 11292653
Cost of Docking Stations 30600000 10200000 27200000 20400000 13600000
Total 48600000 16740000 46209600 35940348 24892653
As can be seen, we have designed our service so as to make it an attractive proposition for
our clients as not only does our offering improve their corporate image but also without any
additional costs incurred. The proceeds from carbon credit sales will more than offset service
charge expenses incurred.
FUTURE ROADMAP
SCALING UP AND EXPANSION PLANS
The Business venture starts off with 30 clients in year 1 and subsequently goes on to
increase to 150 clients by the end of year 5. This would be achieved by rolling out the
service of bicycle transport in a sequentially manner across different areas.
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 23/24
8/13/2019 Sanjeevani IS08070 Cosmic Evolution Others
http://slidepdf.com/reader/full/sanjeevani-is08070-cosmic-evolution-others 24/24
the implementation expertise would be shared with the different franchisees across states.
This would enable the franchisee to operate the business smoothly. The advantage of using
this method is that we would be able to obtain cash, retain the current management and this
would provide us avenues for large scale growth. Also the investor would get an early exit
from the business by receiving cash payments.
LONG TERM INVESTMENT
INVESTOR EXIT AFTER THE FIRST 5-6 YEARS OF OPERATION
Here the investor would seek an exit at that point of time when we strike a Joint Venture with
a larger partner. The JV can be formed with a larger private player with expertise in the field
of public transport or else the JV can be with the government enterprise. This is in line with
the concept of the expansion plan that we have discussed in the previous section – where a
joint venture/collaboration with the state government can be done. This JV would provide
exit option to the investor in terms of cash as well as stock options.