Startups in India streamline auto-rickshaw business

The three-wheeled, often black and yellow auto-rickshaws are ubiquitous in India.

PUNE: When Praveen Narayan Dusane first started driving an auto-rickshaw in this crowded college town, he had to hustle for every rupee. He could wait hours at a rickshaw stand for passengers. He fought with other drivers and haggled with passengers over the fares. Typically, he earned just 300 rupees, or roughly $5, during a 12-hour shift. 

Now Dusane simply checks the text messages on his cellphone for his schedule, with pickups usually coming every hour or so. Business is so brisk that he recently bought an apartment for $33,000 and can afford to send his three school-age daughters to an English-language school. 

"Earlier, I had to sometimes wait all day for a ride, and even then it was up to your luck the kind of fare you got," Dusane said. "Now it's like you can see the money in front of you." 

It is the advantage of the algorithm. 

In a country clogged with congestion, a handful of startups are using technology to more easily connect auto-rickshaw drivers with customers — an Indian twist to Uber and Lyft, the taxi-hailing apps. 

Dusane's employer, Autowale, uses a program to map out potential routes and maximize pickups. AutoRaja has a dial-an-auto service in Chennai. In Bangalore, mGaadi offers rickshaw bookings via its website and app. 

The three-wheeled, often black and yellow auto-rickshaws are ubiquitous in India, where public buses are rather abysmal, subways are limited and taxis are few and expensive. People can hail auto-rickshaws off the streets, but getting one depends on a combination of negotiating skill and luck. Most drivers tend to charge a flat, inflated rate, instead of going by the meter, and often turn down prospective customers if the distance is too short or to an area from which they might not get a fare back. 

Autowale is trying to make the process easier by offering rickshaws on demand. Customers can request a rickshaw through the company's app or website, as well as through the more old-fashioned method, its call center. Passengers pay a convenience fee of about 33 cents per ride. 

Although Uber came to India in September, the service is expensive and doesn't compete in the same space. As in the United States, Uber, which operates in six Indian cities including New Delhi, Mumbai and Bangalore, focuses on the taxi market. 

Autowale doesn't have all the gadgetry of Uber or Lyft. It doesn't use GPS, and most drivers don't have smartphones, which can be expensive. Instead, the founders created an algorithm that predicts an auto-rickshaw's potential route for the day, and assigns pickups accordingly. They serve up the driver's schedule via basic text messages. 

The company promises drivers higher and more predictable income, along with fewer dead miles, those without a passenger on board. In return, the company receives a commission of 10 to 15% from the drivers. Autowale, which isn't profitable yet, reported revenues of about $335,000 last year. 

The first version of Autowale — founded by Janardan Prasad and Mukesh Jha, friends since college — was a flop. 

They initially developed a network of 400 auto-rickshaws across Pune. But they had too many rickshaws and not enough passengers for the unknown service. 

"What had failed was a lack of commitment on both sides," Prasad said. "It was kind of like dating. You have to commit to try to make it work." 

In summer 2011, they revamped their model and started out with five drivers, promising them a specific income, even if they didn't get enough passengers. To commuters, they promised an auto-rickshaw if they booked one. 

"We said to them, work with us for six months, and we'll give you the rides and the fares and improve your income," Prasad said. Within three months they had 75 drivers in their system and were executing up to a hundred trips a day. 

Autowale now works with 850 drivers — including about 250 regulars — and ferries about 100,000 passengers a year. After a successful pilot in Bangalore, it is planning to introduce service there, and in three other Indian cities, as soon as it can raise the money for its expansion. 

Autowale has faced its share of growing pains. As the customer base has increased, there have been quality concerns. 

Satish Chandra, 77, who has been a regular customer since 2012, complains of rude drivers, late pickups and inadequate responses from the call center. "The service has deteriorated." 

Prasad said the company had resolved some of the earlier problems and was also focused on driver training. At its office, which doubles as a training space, Autowale conducts regular workshops. For example, they had to teach some older drivers how to read text messages and how to get a number from a text to call a customer. 

"All they knew were two buttons — green to connect and red to disconnect a call," Prasad said. 

Training sessions have also included some basic phrases in English: "good morning," "you're welcome" or "have a good journey" when dropping off a passenger at the airport. 

One of the main areas of focus has been teaching drivers the concept of customer retention. For Autowale drivers, they instruct, the chances of encountering repeat customers are high. And if they don't behave properly, they dilute the brand and their own incomes. 

"The key is to earn with respect and dignity and in a professional manner," Prasad said
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