UB-Idea Series: The Timeshare Taxi Fleet

One of the great worries as Indian cities grow and do so in an unplanned way is the access to the automobile increasingly for some and lack thereof for most others. And of course, the pollution and the traffic chaos go hand in hand without saying. Last week I had the misfortune of having to traverse some hundred kilometers in one day from one end of Hyderabad to the other and back and I did this in auto-rickshaw in part and in a car-taxi the rest. Hoping to get some respite from the dust and heat I decided to call the much hyped citi-cab service but somehow I ended up calling a competitor to citi-cab called Call Taxi. The cab arrived almost an hour after I called and to my chagrin, the car, a Maruti Omni, did not have air-conditioning and so for all practical purposes I traveled in an auto-rickshaw.

I know of many people in Hyderabad who own a car but seldom use it. Some of these car owners use the cars to drive their families around during the weekends but some others have the cars but cannot drive them. So they employ either a part-time or a full time driver who himself might live quite a distance from the car-owner's house and therefore will have to use his own transportation to get to the car-owner's house before getting behind the wheel. These drivers are not very reliable and their turnover is very high. Also these not so automobile-savvy car-owners have a hard time taking care of their cars. Between the unreliable drivers, car maintenance and the big monthly payment (EMI), these car-owners sometimes wish there was an easy way. And IMHO, there is one.

I call it the Timeshare Taxi Fleet (kinda sorta like the timeshare resort homes) that will be set up with a two-part tariff. The business idea basically is that many of these people who travel by auto-rickshaw a lot and sometimes use a car-taxi pay a membership fee to own a piece of a taxi fleet. The taxi fleet along with the drivers and all the scheduling etc is managed by the company that will run this business. When the members need to use the taxi they call a number and the taxi will be available for them within half-an-hour. Then the member will pay at a rate similar to what they would pay an auto-rickshaw but for more comfort like nice cars, well maintained interiors, air-conditioning to name a few. An online portal could be used to make any advance reservations including any rentals for multiple days. Between the convenience of having a nice car and a driver in minutes and the lack of all the pains associated with owning a car, this would be a great alternative to buying a car for most people.

Let me illustrate this idea with a few more details. Say a hundred people in Hyderabad are interested in this. Say we wanted to buy ten cars, we would use the membership fee (which is on an amortization schedule and if a member leaves, they will get the remaining value of their membership) and buy ten cars. But when someone actually uses the car, they will have to pay for the car per auto-rickshaw rates. For longer duration uses, there will be discounted half-day, day and weekly rates. These rates, however, will be higher than what you would pay for EMI and driver's services combined to discourage some people hogging the cars too much. There are a lot of logistics that will need to be worked out (including what if everyone wants a car at the same time or if nobody wants a car) but they are beyond the scope of this blog. GPRS, GPS, online portals, route and docking (where the cars will be parked when idle) optimization programs, cell phones etc are some of the few technologies that will be in use in the business model. Over time, many of those that currently have a car will most likely find this much more attractive than owning the car and will switch and there will be many copy-cat services. But the first one to move will have an enormous advantage.

If anyone ends up using this business idea, please let me know as courtesy. There is no obligation whatsoever beyond that. I will be gladly willing to develop the idea further for a business plan.