A year ago, Kapil Raizada and Manish Rathi walked into the office of Prasanna Patwardhan, managing director of inter-state bus service Prasanna Purple Mobility Pvt Limited, and the president of the Bus and Cab Operators Association of India. Raizada and Rathi had co-founded IntrCity Smart Bus—then a month old—and weren’t looking for membership. 

No. Instead, they were aiming to bring a chunk of the 20,000-plus inter-city bus operators the association represented onto their platform, by offering a premium service and fixed returns.

IntrCity’s model is to aggregate bus operators, offer a standardised service across all buses, and sell tickets via RailYatri, the online ticketing company from which it was carved out. Raizada and Rathi are betting that standardised luxury services like air-conditioned waiting lounges, clean interiors with on-board toilets, and free Wifi will not only have travellers lining up, but also willing to pay a premium. 

A clear demand focus, much like any other platform.

“Bus operators historically have been transportation companies,” explains Raizada. A supply-side focus means they excel at paperwork and maintenance of buses as well as arranging drivers and cleaners, but fall short of servicing demand, he says.

“We have no real expertise on the supply side. So what I tell the operators is that if you can take care of the supply side, and if we take care of the demand side, together we can change the industry,” he adds.

And what’s in it for the bus operators?

For one, they won’t have to worry about the finer points of service. More importantly, they get a fixed “rent” for each bus, irrespective of ticket sales, eliminating worries over seasonality of demand.

This part-Uber, part-OYO model has the potential to upend a market that has as many as 250,000 air-conditioned buses in the country—a market that IntrCity estimates to be worth $4 billion. A number of other startups, with similar models, have mushroomed in this space in the past one year, such as Gurugram-based Yolobus and Shuttl, and Bengaluru-based GoSuperBus. And then there is the impending arrival of the pioneer of asset-lite, operations-heavy model, FlixBus—the German unicorn backed by automotive giant Daimler and American private equity firm General Atlantic.

Raizada estimates that private operators account for roughly 70% of all long-distance bus travel—an overnight journey or one that is over 350 kilometres—in the country. State transport associations, which control the remaining 30%, find it tough to match the service offered by private operators. Raizada claims Nitin Gadkari, India’s transport minister, told him he wants to see larger participation from private players.

However, IntrCity’s potential has not translated into results yet, at least going by the number of buses it has managed to sign up.

New age, new companies

  • IntrCity 90 buses
  • Expresso by Shuttl 54 buses
  • Yolobus 30 buses

Rewind to Raizada and Rathi’s meeting with the Bus and Cab Operators Association in March 2019.

AUTHOR

Pranav Balakrishnan

Pranav writes about the business of moving people and things around, i.e, mobility and e-commerce. Over the past two years, he has written about Ola, Tesla, Flipkart, Amazon, and the increasing role played by Reliance Industries in the Indian technology story. Pranav joined The Ken from Asian College of Journalism, Chennai, specialising in business journalism.

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