Conveyance is a major issue for people residing in Tier I cities. However, by introducing India?s first metered radio cabs under the name Meru Cabs, Neeraj Gupta offered a solution that made every traveler?s journey fast, safe and pleasurable.
In this entrepreneur interview, Neeraj Gupta traces his journey from starting a garage to becoming the MD of the 3rd largest ?Radio Taxi? company in the world. No wonder, Meru Cabs is the only company in India to have won the ?Best IT User Awards? by NASSCOM CNBC TV-18 in 2008, 2009 & 2010.
Q: Can you tell us how you got started from an old garage in Oshiwara, Mumbai.
Till the time I got married at the age of 24 I was trying my hands at odd jobs and not doing anything substantial or material. After marriage, I realized it was high time I settle down with some business that is concrete and gives me full time occupation. With a loan of Rs.50000/- from my wife, I ventured into an automobile garage with a partner who had the technical expertise of running a garage.
With the limited capital in hand, opening a road side garage seemed to be the best option at that time. I managed the sales & marketing side of the business and very soon we had a long list of corporate and retail clients for our business
Q: When and how did Meru Cabs happen?
In the year 2000, I had ventured into staff transportation business with a single mini bus contract and later expanded on pan India basis with a fleet of 1300 vehicles by the year 2006. By this time, the clients were demanding newer vehicles fitted with technology and competition was also brewing from un-organized players.
During that year Govt. of Maharashtra had come out with a tender to offer license to operate radio taxis in Mumbai. This was a unique opportunity for us as we could enter the retail segment under this scheme and had the fall back arrangement of corporate business to keep us afloat till the retail business starts kicking in for us.
Q: What were the key challenges you faced while starting Meru Cabs?
There were quite a few challenge in this business model and hence not many looked at this opportunity.
1. The license was for 10000 taxis that means it required a huge capital investment and ability to manage such a large fleet.
2. The main condition was to obtain the existing black& yellow taxi permits on lease which was a completely unchartered territory with no clue as to how that will be managed.
3. The segment was highly un-organized with a challenge to train and develop drivers from the black & yellow segment, own and maintain such a large fleet which was never done in India before.
4. Since the market was dominated by the black & yellow taxis, there was a fear of back lash and resistance from the taxi drivers and unions.
We faced all the above issues but managed to overcome them over a period of time
Q: What advice would you give to entrepreneurs who are planning to start a capital intensive business?
Access to capital ? first through own resources then debt and lastly through equity is the pre-requisite. To enter a capital intensive business one must evaluate his strengths and challenges in the business he wishes to enter. Understanding of the market and its potential to get a share of the market is very important.
Ability to sustain is the key to success. Complete commitment to the venture by the entrepreneur and a stable management team to operate a large business is a must for a capital intensive business.
Concluding part of this interview will be published next week. Stay tuned!
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About Meru Cabs: Meru Cabs was one of the first companies to launch metered ?Radio cabs? in India under its brand ?Meru.? In the last 3 years, they have shown consistent growth in terms of the fleet, people revenues and popularity. If you want to book a cab in Mumbai, Bangalore, Delhi or Hyderabad, try them out at www.merucabs.com
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