App based cab aggregation is, no doubt, a capital centric approach to business, and every active player in this niche – Uber, Ola mainly, are burning money to survive.
But the business model is nothing short of magic – without owning a single cab, you have the power to mold the entire transportation industry.
Anand Mahindra, Chairman and MD of Mahindra Group, is the latest to get bit by the bug of this niche. Reports are strong that Mahindra Group, which churned out revenues of $19 billion last fiscal year, may soon launch can aggregation services, similar on the lines of Uber and Ola.
However, here is a catch here: Mahindra’s cab aggregation services, powered by an app, won’t be mere CNG shared cabs, but something even more.
Mahindra’s Cab Aggregation Services: Rival Of Ola/Uber?
These strong hints and possibilities regarding Mahindra Group’s cab aggregation services were revealed during a recent interview of Mahindra Group Chairman Anand Mahindra.
During the interview, Anand Mahindra hinted that their company may soon launch electric car based cab aggregation services, with special focus on cab sharing services.
He said, “Mahindra intends to not only make the product like low-cost, spacious, urban electric taxis, but we also plan to invest in the ride-sharing space…we will look at partnerships and other investments because we think that the industry is going to be one of solutions, and not just products”.
The possibilities become stronger, when you link this statement with their recent investment in a startup which provides electric scooters. Mahindra Group recently invested in Scoot Networks, which is an urban mobility solutions provider from San Francisco.
Why Mahindra Group Wants To Venture Into Cab Aggregation Business?
The reason is pretty simple: In order to survive.
Mahindra Group is a veteran of automobile industry, and they can sense the future and the changes which is inevitable.
Sample this: Anand Mahindra’s own daughters are planning to use cab sharing services, instead of owning a vehicle.
He said, “Even my daughters have no intention of owning a car for commuting. This reality is now at home,”
Besides, Mahindra Group is seeing a pattern, wherein sales of private vehicles starts “tapering off”, as more and more people join the cab sharing wave.
In fact, as per Anand Mahindra, “plain-vanilla sedan” are a “threatened species”, as their sales will continue to dip in the coming months.
Confirming this prophecy, he said, “There will be a leveling off, or a sinking in the personal commuting segment.There will be a dramatic shift in the customer segment. Overall, will it go down? Hopefully yes, as we want less cars on the streets,”
Mahindra Group’s Plans: Super Niche Cab Sharing Services
As per the details of the interview, it is clear that Mahindra Group wants to foray into app based cab sharing niche, but wants to do it via capturing super-slim niches.
Such as SUVs in Goa!
During the interview, Anand Mahindra said, “For example, why shouldn’t Mahindra have a ride-sharing app that offers Thar SUVs in Goa? The niche applications will do better. We will not burn cash”.
This clearly proves the fact that Mahindra Group is right now studying the market, and the industry, and they are well aware that existing companies like Uber and Ola are burning cash to survive, and they are planning something different to avoid this scenario.
Predicting the future, he said, “It is like recognizing a new reality. We cannot expect the auto industry to grow like this in the absence of ride-share”.
It is not that Mahindra Group is alone in the endeavor to tap the future of Indian transportation industry.
Mukesh Ambani led Reliance Group has already revealed their plans to launch app based 4G powered cab aggregation services, and rumors are in that they have already bought around 2000 Toyota Etios cabs in Kolkata for the same.
Newer companies like TYGR has already expanded into Kolkata, and plans to venture into Bengaluru, Mumbai and other cities.
Ford India has bought a stake in self-driving car startups ZoomCar, while Hero MotoCorp may too venture into cab aggregation services, very soon.
When Mahindra Group signed a contract to provide 40,000 cabs to Ola, then it was the first step towards themselves venturing into the sector.
And this recent interview by Anand Mahindra proves this fact.
We will keep you updated as we receive more information.
