MERU Cabs Business Model


Continuing with my very old post on business models of franchisee outlets and cab services. This post talks about the the model of one of the popular cab services in India MERU cabs. The other cab services could be operating with minor variations.

  • Driver deposits Rs.10000.
  • MERU buys the car and gives it to the driver. The driver is not an employee of MERU
  • MERU trains the drivers on soft skills. Basic qualifications for the driver is a minimum of three years of experience on the city roads and with a basic knowledge of reading addresses in English.
  • The fuel cost has to be borne by the driver
  • The maintenance of the car is taken care by MERU
  • MERU helps the drivers by providing the booking to drivers through their call centers.
  • The driver is free to take passengers if he doesn’t get calls from the call center
  • The driver is assigned a ride from the call centre by tracking his presence through the GPS navigation system and hence he can NOT ignore the call centre’s trip assignment.
  • In return the driver provides Rs. 600-950 per day to MERU (how much exactly?)
    Note, it is a per day charge and not a per call charge, which is means that even if the driver does not get a call from MERU on a partucular day he has to pay Rs.650-900 as “rent” for using the car.
  • Whatever the driver earns above these 600-950 rupees is his own income.

You can actually sit down think about the pros and the cons of each of the “features” of this business model from the perspective of the owners of MERU as well as the drivers( whom they call subscribers).

The content has been prepared from different sources on the internet, conversations with MERU cab drivers etc. There might be some differences. Please feel free to point out, if there is a difference from what is real.

Advertisements

2 Comments

  1. -The Meru cab driver pays Rs. 800 per day in Delhi NCR.
    – The cab remains an entity with Meru but in case of another cab service – Easy Cab – the car becomes the driver’s after 5 yrs or after a particular amount is paid. Hence, the ownership is transfered whereas this is not the case in Meru cabs.

    Reply

  2. In Mumbai, the drivers pay a subscription fee either of Rs.750 or Rs. 850 per day, depending on whether they drive a Logan or Esteem

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s