Home >Companies >Start-ups >Other states may take cue from Haryana’s bike taxis, say experts

Bengaluru: If you are in Gurgaon and want to get somewhere fast, motorcycle taxis may be the best way to beat the city’s traffic-cluttered streets.

Earlier this month, Haryana became the second state in India, after Goa, to allow motorcycles to be used as a mode of public transport, paving way for the launch of several services that offer affordable, speedy and convenient rides to passengers.

These taxis offer a fixed fare and pick up passengers at the click of a button on their smartphones, or you will spot them at bike taxi stands in the city, wearing uniform vests and helmets. They offer passengers helmets and hair caps, wet wipes to freshen up after the ride and insurance coverage against accidents. It means commuters needn’t haggle with auto-rickshaws or cycle-rickshaws for short-distance rides in the city.

Experts say Haryana’s new regulations could inspire more states such as Delhi, Mumbai and Bengaluru to follow suit, potentially boosting the confidence of such taxi services in other similar markets in Southeast Asia—Singapore-based cab-hailing company GrabTaxi that operates GrabBikes, and Indonesia’s Go-Jek that operates the local version of popular motorcycle taxis—to enter India.

Globally, the market for motorcycle taxis is worth $500 billion, according to World Moto Inc., a maker of motorcycle taxi meters.

Some local companies have already received financial backing from early-stage investors. Still, raising large amounts may be a challenge as venture capital firms are sceptical of demand for such services picking up the way ride-hailing cab services such as Ola and Uber did in India.

Baxi, owned by 74 BC Technologies Pvt. Ltd, is one of the companies to get a permit to launch motorcycle taxi services in Gurgaon. It operates a technology platform that connects people who travel to offices, colleges and residential areas from metro stations and bus stops.

“For a personalized pickup and drop, a daily commuter has to pay at least 50 to an auto-rickshaw. With a bike, we are trying to offer a 20 personalized pickup and drop ride," said Ashutosh Johri, one of the founders and chief executive of Baxi.

Baxi, which has 100 motorbikes registered on its platform, offers riders the option of hailing a taxi through a mobile-phone app that allows passengers to enter pickup and drop locations.

For those using feature phones, Baxi offers the option of dialing into a dedicated mobile number and hanging up before connecting. The taxi service will immediately send a token number to the passenger’s mobile phone, which is then used to start the ride.

It lets users pay using smartphone wallets or by cash, or even by recharging their credit on mobile phones.

The service, set to be launched on Tuesday, will charge users a fixed base price of 10 and 4 for every additional kilometre. The fare also includes an additional charge of one rupee a minute.

“It provides urban commuters with that extra productive time to make more out of their daily living," said Arunabh Madhur, chief executive and founder of M-Taxi, owned by AceFenders Travels Pvt. Ltd, another bike taxi company that is set to start ride-hailing operations Tuesday.

Analysts expect the business to thrive in a market like India where two-wheelers are a popular mode of transport. In the last eight years, the number of two-wheelers sold in India more than doubled to 16 million, data from urban transportation consulting firm Valoriser Consultants showed. This compared with a 67% rise in the sales of cars to 2.6 million in the same period.

“Whether more states will adopt such taxis as a mode of public transport will depend on the success of Haryana," said Jaspal Singh, partner at Valoriser Consultants. Singh expects global motorcycle taxi operators to closely watch the expansion of this business in India before they enter the country.

Baxi’s Johri said it has already received $1.5 million in early stage investment from a group of investors led by HT Media Ltd and has commitment for an additional $15 million. HT Media publishes Mint. An executive for HT Media declined to comment.

M-Taxi has also received an undisclosed amount from two early-stage investors: Jairaj Singh and Mandeep Singh.

But some investors are not convinced. “People take such taxis only to travel short distances, without much luggage and it can’t be used to travel together as a family. So the use-cases are limited," said Vishal Gupta, managing director of Bessemer Venture Partners, a Silicon Valley venture capital firm, in India. Bessemer previously invested in Taxiforsure, a cab aggregator which was acquired by Ola earlier this year.

Further, for the moment, these services don’t have any specific options such as female drivers for lady passengers who don’t want to pillion ride with men, a potential hurdle to its expansion.

Taxi-hailing services faced a major setback in India after a lady passenger was allegedly raped by a cab driver on Uber’s platform in 2013. The driver, who was arrested, is standing trial. He has denied all charges.

But Baxi’s Johri is confident of overcoming all challenges. “The jury is still out."

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