(Samar Singla is speaking at Echelon Asia 2018, to be held in Singapore on June 28-29)
Jugnoo, an online auto rickshaw aggregator emerged from the small city of Chandigarh in India, recently forayed into Singapore with a different product — a reverse-bidding system that enables freelance drivers with commercial driving licence to bid for commuter requests. It has already partnered with nearly 700 drivers in the city-sate for the new product, and is now looking forward to on-boarding 2000 drivers in the coming months.
Founded in November 2014 by Samar Singla and Chinmay Agarwal, Jugnoo has seen a lot of ups and downs during the four years’s of journey. Backed by the likes of Paytm, Snow Leopard Ventures, and Rocketship.vc, Jugnoo has fought all odds to become a leading player in the cab-haling segment in India.
Singla shared his journey with e27.
What was your motive to start Jugnoo?
Hailing from a business family, ideas of setting up and driving my own business came naturally to me. Before embarking on the idea that Jugnoo was, I founded two businesses. I sold my first company named ‘Prodigy foods’ and founded Click Labs in 2011, a profitable SaaS-based technology solution provider for on-demand businesses known as ‘JungleWorks’.
In November 2014, I founded Jugnoo along with Chinmay Agarwal at a college fest in Chandigarh. People were given free rides and the response was phenomenal which gave us the initial kick. We found the potential of such a service in tier II and tier III cities of India, where auto-rickshaw is the primary public transport medium. We started by connecting the ubiquitous Indian auto-rickshaw with passengers, further utilising it for logistics.
I understand Jugnoo was started as an auto-rickshaw aggregation platform. How risky was to venture into cab-hailing when Uber and Ola were already fighting it out for a market share?
We created our own niche and found the potential in tier II and III cities. In the early years of inception, Jugnoo has evolved into an end-to-end solution for all the hyper-local needs of its customers, trying to solve the problem of providing affordable services pertaining to the daily needs of its customers via a single platform.
There are around five million auto-rickshaws in India, whereas the utilisation is only 30 per cent. Thus, Jugnoo was launched as an auto-rickshaw aggregator to bring structure into this space, providing work to drivers and affordable means of transportation to the public. Within two years, we started using our logistics network across different verticals of hyper-local space and launched verticals such as Meals, Fatafat and Jugnoo Delivery. This sort of business model is unique and has not been implemented by any other player in the market.
From day one, our core focus was on survival rather than competing with the big sharks. There is enough for everyone in this market as India is a booming economy.
What were the initial challenges? How did you overcome them?
Most of the challenges that we faced were similar to challenges faced by other entrepreneurs — the right team, and the right execution to bring the idea to life. However, for Jugnoo, our challenge was a little different. Being an unorganised industry, convincing auto drivers to come on our platform was something we had to spend considerable time on. Educating and training them to agree to a standard fare model and utilising the Jugnoo platform well to amplify their business was the most important task initially.
The Jugnoo team focused on solving the problem and made easy to use app for the drivers in their regional language. Also, an internal training programme named ‘Driver Delight’ was started, where the drivers were enrolled and provided with basic training, personal grooming session. They were taught with basic etiquettes on how to deal with customers etc. All these measures have raised the living standard of auto drivers and there income and efficiency have been increased.
How has been the online cab-hailing market faring in India? What is next for companies operating in this space?
It’s been four years since we started Jugnoo in the northern city of Chandigarh in India. Phenomenal responses in the initial days and offering convenience to users gave us the motivation to rise. Jugnoo has gained prominence in the online cab-hailing started from Chandigarh and now expanded into more than 35 cities in India.
Revenue in the industry is expected to show a CAGR of 19.6 per cent (2018-2022). User penetration is also expected to grow many folds in coming years.
In India, the demand in southern cities is very high and we have hands-on in the ride-hailing market in India. Since we have a totally different target audience as compared to Uber or Ola, we don’t wish to step into their space. We are targeting more tier 2 and tier 3 cities of India.
Where is the industry headed for? Do you see new-age tech play a vital role in improving efficiency, moving forward?
The industry still has high demand and has many more years to reach maturity stage. We can’t even imagine a decline stage in the industry anytime soon. With a motive to provide convenience to both customers and drivers, we are adopting new technologies. The market in India is still in its growing stage. With the drop in prices of smartphones and internet, more potential customers are coming online offers us an opportunity to grow rapidly.
New age technology definitely plays a crucial role in terms of betterment of service offered and adding more convenience to users with constantly decrease in customer complaints. Many people believe that technology is killing the jobs, in fact, technology is the only option to save jobs. The reason we adopt technology to save the future. We started a new trend in the industry with “Reverse Bidding” started with Jugnoo Taxi in Singapore.
You are operating mostly in smaller cities and towns. Are the market dynamics and user behaviour in small cities different from that of bigger and metro ones?
Our primary focus is the small cities and thanks to the digital India movement that has made our work easy. The major plus point in small cities is no competition for us and smaller demographics are easy to control and replicate. As compared to metro ones, the spending capacity is less and the distance travelled by the users is also comparatively less but the number of transactions is higher in tier II cities.
While the majority of Indian population still live in tier II and III areas, last estimated at 70 per cent of the total population — cities in India are also growing, with the number of inhabitants currently in the hundreds of millions. As per the ORF report, by 2030, India will see the rise of some 68 urban sprawls, each with a population of more than one million. It is indisputable that cities are the engines of economic growth and we see potential in these cities.
What was the motivation to expand to Southeast Asia, where local startup Grab has forced even mighty Uber to wind up operations?
Growth in population and wealth have led to an explosion in transport demand in Asia. Singapore customers are open, educated and understanding of startup models and the government is also very open and cordial. Jugnoo forayed to the market to fill the gap left by the big players and makes a significant investment in Singapore’s ride-hailing market. The company is taking a unique and driver-centric approach in Singapore, by launching a ride-hailing service that uses a “reverse-bidding” model for the first time. The idea of reverse-bidding had been in development for a while and we are motivated to launch the system in Singapore, rather than our home country, after observing the proposed buyout of Uber and Grab.
Since the launch, we have around 700 registered drivers and we aim to exceed the number by 2000.
What have been your key learnings as an entrepreneur?
The key learning so far is to get the business model right. Initially, we were focusing more on geographies. We did experiment on models and geographical expansion in many cities without getting the model right, which was not a good fit. Now we are concentrating on getting the semi right models rather than expanding geographically.