Rideshare 3.0

Let’s face it, parents are always right. Especially when they tell you to study well and make enough money “so that you can buy the sea-facing flat on Marine Drive.” Forget bragging rights, you could waltz down the Queen’s Necklace promenade and get to work every day. No traffic jams, no three-minute traffic signals, and no hefty fuel bills. Even if the office is in the suburbs, you’d cut through the city like a hot knife through butter, snickering at those struggling to crawl in the opposite lane.

While it’s fun to dream up alternative scenarios and humour yourself, Mumbai’s traffic is no joke. Reported as one of the most congested cities in the world, India’s financial capital has still not learnt how to deal with the ever-increasing population. And it’s not just Mumbai, commuting in every metro city is taxing, soul-wrenching and time-consuming to say the least. As of last year, the average one-way travel time to get to work, across six major cities, stands at a little above 51 minutes (See: Keeping pace). If you’re from a city, this daily commute saps as much as 24% of your waking hours. But one company is trying to ease this mess by offering a solution that does not require you to struggle in local trains or buses or lose all your energy driving, even before you get to work.

Cold Start

In 2009, IIT Varanasi-alumni Akash Maheshwari and Deepesh Agarwal set up shop as a SaaS (software-as-a-service) to manage taxi fleets for corporates. This was when smartphone penetration was low, data wasn’t too cheap, and the name ‘Jio’ didn’t infest every conversation. Corporates would hire facilities management companies such as JLL and CBRE, and have multiple cab suppliers. And in a largely unorganised market, that whole process would be arduous for any company, not to mention wasting time on calls with the suppliers when something as simple as the timing goes wrong. Naturally, it needed some change.

That’s where MoveInSync comes in. While brands such as Ola and Uber fight for the commercial cab rider’s buck, there aren’t many tech-based solutions for employee transportation in this country where public transport is laughable in many ‘metropolitan’ cities. With two types of solutions for organisations, MoveInSync tries to fill the gap, to make the daily-commuting office-goer’s life easier. Its business models include — MoveInSync Corporate or MC (the SaaS product) and MoveInSync Total or MT (the full-stack service) — both contributing equally to the company’s revenue. The former is a subscription model with which the corporate can use MoveInSync’s app-based programme, charged as per the number of employees using the service — Rs.280 per user every month. The platform’s algorithm assigns cabs to the company’s employees based on the availability of vehicles from the suppliers. While MoveInSync’s app allows the company to track the fleet, it still means the office has to contact and arrange the cab services. That’s why, Agarwal is now betting on the MT model, which he expects will make 80% of the business in the next three to four years.

Here’s how MT works. Suppose a company wants to organise a pick up and drop service for its employees, all it needs to specify is the addresses and the time. Here, charges per employee may differ based on location-specific variables such as taxi tariffs and fuel costs.

The only other input from the company comes in the form of payment, which can be a lump sum for all its employees or on a per-employee basis. Effectively, the start-up signs a service level agreement with the clients which Agarwal describes succinctly, “The clients tell us where the 50 employees stay and when they need to reach the office. They don’t care if you buy, lease or steal the cars as long as you have valid documentation and your costs are defined.” MoveInSync gets the cab service providers on to its platform, and its app becomes the organisation’s fleet tracker.

And if your company has opted for the start-up’s MT solution, you no more have to worry about calling your fleet guy at 6 am, who would then call the clueless driver to figure out where he is (and his phone would be switched off), and you and three others in the same pick-up would probably reach work an hour late. With MoveInSync’s app, everyone — the company, the employees and the cab driver — are brought on to the same platform and there is no lag with ten humans calling each other.

The latest model Agarwal and team launched in April is a predictable transport model called Get to Work (G2W) and, in the simplest terms, it’s an amalgamation of Uber and a school bus. A group of office-goers gets picked up from home and office at a pre-set time and each individual could be from different companies located in the same area. And unlike Uber or Ola, there’s no surge pricing. However, in this model, the employee foots the transport bill and not the company. 

Agarwal believes that this could turn into a co-pay model. He says, “The office saves on parking cost, since the employee isn’t driving to work. So, suppose the service costs about Rs.6,000, the company could refund the parking rent to the employee.” G2W is currently operational only for employees in Bengaluru’s Prestige Tech Park, home to about 25 companies. Although the service opens MoveInSync to the entire office-going crowd, at nearly Rs.6,000 per month, it may not be for everyone, when your monthly public bus pass costs just Rs.800 on an average. 

Today, MoveInSync operates across 22 cities, in three countries and employs over 40,000 drivers who transport 300,000 office-goers daily. Some of its major clients include Google, Microsoft, Amazon, Adobe and Wipro. Maheshwari says, “The market has seen a tectonic shift. Earlier, we were adding one-two clients every year. That’s because in the first two years, we had to sell them the concept, which wasn’t that popular.” 

Burning lean

The company started out bootstrapped in 2009, but raised angel rounds starting 2011. “That was the year we signed up Google. Our first venture funding round of $3 million came in 2014 from Inventus Capital, Saama Capital and Qualcomm,” says Maheshwari. The company has raised a total of $11 million so far, most of which has been used to acquire talent, develop technology and expand internationally into countries such as Sri Lanka.

The investment in MoveInSync clearly shows how venture capitalists are betting big on corporate mobility, a space that is worth $12 billion. Analysts believe there are only two main players in this space, the other one being Routematic. The latter was founded in 2013, has raised $4.5 million via Blume Ventures and VAM Investments, and has clocked revenue of $275 million in FY19. And Sriram Kannan, co-founder of Routematic, considers MoveInSync as its only competitor right now. “As a traveller, what I want is consistency, not even comfort. Ola, Uber, and Grab are in the on-demand market. You open an app when you want a cab. But when it comes to scheduled trips, that’s when you use services such as Routematic and MoveInSync,” he says.

Suresh Shanmugham, managing partner and co-founder, Saama Capital says, “MoveInSync is the clear market leader in the office commute space, which makes it a great investment opportunity.” And he’s right. While MoveInSync handles close to 2.3 million trips per month currently, Routematic does one million trips.

He believes MoveInSync’s cloud-based platform brings transparency to the transportation billing process, which is crucial because employee transportation is typically the second biggest cost head (after salaries) in most MNCs and tech organisations. “Automation of employee transportation is a space we are bullish about. Presently, commute to work is a key element that defines work-life balance,” adds Shanmugham.

Wipro, the company’s biggest customer, is quite the happy client. Nittan Bhalla, general manager of facilities management and operations at the tech company, says, “We selected the MoveInSync app because it ensures safety and security of employees, provides transparency and helps optimise cost.” However, Bhalla adds that MoveInSync’s AI-enabled demand prediction has scope for improvement. He suggests making the platform device-agnostic, wherein any GPS device can be integrated seamlessly.

Jagannarayan Padmanabhan, director-transport and logistics, CRISIL, has an interesting take on MoveInSync’s model. He says, “The Uber-like, asset-free model makes it easy for the company to scale up. Further, it also helps its suppliers to grow through the platform.”

Like Agarwal, Padmanabhan believes the MT model has a lot of scope but he is wary of its operations-heavy nature since the firm has to monitor the fleet. Plus, he adds, “The competition could replicate the model, and if they do it at a lower price point, it could jeopardise MoveInSync’s game.”

Plus, what about competition from outside the corporate mobility space? Cab aggregator giants could easily want a slice of the pie. But Kannan says it’s not a concern presently. “The on-demand market is beautiful for booking a cab. But, you don’t wake up and decide to go to office. You wake up because you have to go to office. That is the market I am catering to,” he says.

Sure footing

Besides the risk of competition catching up, there are other challenges. For one, facilities management companies are not too happy with the tech that will make them redundant. With the start-up’s end-to-end model, companies don’t need on-site people anymore since all operations are handled centrally from the command centre in Bengaluru. This includes monitoring security and maintaining help desks for the employers. “So, instead of companies employing people themselves, we can do the entire work with fewer people,” explains Agarwal. 

The co-founders mention talent acquisition as a major pain point. Understandably so, since tech giants such as Amazon, Google and Facebook attract the crème de la crème of talent from the best business and engineering colleges.

But Agarwal is not too worried yet. The company turned profitable in 2017 and he says, “Since we were bootstrapped, we never really tried to buy businesses. One of the key reasons we are profitable is because of the huge demand.” In FY18, the company clocked Rs.550 million in revenue, and Aggarwal claims to have stopped just shy of the Rs.1 billion mark in FY19. “With 100+ marquee customers, they have approximately 50% market share in the enterprise commute space,” says Shanmugham. 

Agarwal remains optimistic about 100% growth in the coming years, arguing, “If the problem is big enough, why shouldn’t we grow? It’s only getting harder for employees to reach offices, and that means more opportunity for us.”

He also has his eyes set on the ride-sharing space, but with the economical and ever reliable auto-rickshaws. While the early adopters of app-based ride-sharing services had it good, some drivers minting to the tune of Rs.120,00-150,000 a month, it’s not a rosy picture anymore as Uber and Ola crack down on margins and incentives to stay competitive. “There are only so many cars that our streets can take,” Agarwal observes, adding, “In countries such as India where rickshaws are commonplace, ride-sharing need not be limited to cars. With the right tech in place, the nippy three wheelers can be just as effective a mode to pool rides, especially in case of last-mile commutes.”

It’s not a crazy idea really. Go to railway stations in Mumbai and you’ll notice that this model is already at work. However, it remains unautomated. The value-addition would be bringing that model on to a tech-based platform. “It’s a matter of someone doing it, either Ola, Uber, or perhaps us,” says Agarwal.

While he doesn’t reveal any plans for this business, he aptly points out, “In the end, putting more people into a vehicle like an auto rickshaw, and making their travel more predictable is what will solve both the commute and the congestion problem.” As the founders get back to the board and figure out solutions for mobility issues, the number of commuters in the country — 10 million daily at present — is only rising. By entering this space early, MoveInSync is already miles ahead of any competition. And who knows, tomorrow, you and two other strangers may share a scheduled auto ride, saving some money and fuel while cruising through the streets.