NEW DELHI, July 23: Taxi service provider Mega Cabs is looking to invest Rs 500 crore in the next three years to expand its services to 20 cities, betting big on airports, railway stations and other public points of transit.
The company, which ran into huge losses due to entry of aggregators like Ola and Uber, plans to revive market share with aggressive investment in technology and taking fleet size to 8,000 vehicles.
“We feel by 2020 we will be in 20 cities with about 8,000 vehicles,” Mega Cabs Chairman Kunal Lalani said.
The company is present in six cities, including Delhi and Bengaluru, with a fleet size of about 2,500 cars.
When asked about investments, Lalani said: “Investment will not only be in vehicles but also in technology and over the next three years we would look at overall investment of about Rs 500 crore.”
On target customers and business model, he said airports and railway stations are one of the biggest points of the business.
The company, which serves corporates apart from operating in retail segment, will roll out services in Ahmedabad, Hyderabad, Chennai, Goa, and Jaipur in the first phase.
When asked about the period when the company went into losses due to new entrants, Lalani said taxi aggregators enticed the drivers with such lucrative schemes that we got stuck on the road without being able to ply the vehicles and as a result utility came down from 95 per cent to 50 per cent.
From 2013 onwards everybody has bled, many other radio taxi services were struggling some of them were closing, Lalani said, adding that “we have also had a fair share of losses.”
“Ola and Uber have also incurred losses during 2014 to 2017, so there is no way anybody could have made money,” he claimed.
Criticising his rivals, he said: “Ola and Uber come with a mandate and a backing of sheer money power and it challenges the basic fundamentals of business, that you must lose on every trip to make yourself so large and then recover money.”
He, however, acknowledged the fact the new entrants have helped in broadening the cab industry.
“We appreciate that their coming into the business multiplied the industry manifold,” Lalani said, adding that “we were frogs in the pond earlier and they came and said let’s make it a sea.”
Other than Delhi and Bengaluru, the company has presence in Kolkata, Pune, Amritsar, and Chandigarh. (PTI)
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