Research
The research was conducted digitally as well as through in-person interviews with drivers and commuters.
Such services have 2 segments. One serves drivers of tuk-tuks/cabs and the other that serves riders, commuters, and people who want to go from point A to point B.
For drivers
The companies offer a way for drivers to accept rides digitally, and in turn, they charge 20-25% commission from drivers on each ride. Prices for rides are set by companies and drivers don't get a say in it. At the same time, drivers are not loyal to any company. Most of the time, drivers have all the applications available for ride-booking on their phones and they choose the ride that will pay them the most. The companies also provide payment gateways for riders to pay the drivers, but such payments are sometimes delayed by companies, so in turn, drivers push commuters towards paying in cash.
For commuters
The companies give a trustworthy option to book rides conveniently, thus eliminating anxiety associated with not having options. The companies also provide features such as location sharing, online payment, digital wallets etc. The commuters also are not loyal to any company, commuters only want a way to book a ride. Many research agencies already have researched the services ride-sharing companies offer to customers to understand the problems faced by commuters. The following image shows the major problems faced by commuters briefly.
Needs and insights
Drivers
- Want instant settlement of payments
- Don't want to pay commissions
- Companies feel distant- not loyal to any company
- Need to use application all the time
- No control on fares
Commuters
- Companies charge 2x, 3x charged during peak hours
- Not satisfactory customer services; companies feel distant
- Need an application to book a ride
- Not really loyal to any company
- Ride cancellation, mobile app experience etc.
The new service should be
For commuters- a digital service to book and manage rides, which comes at lesser prices, is available through WhatsApp and is more reliable than other services
For drivers- a digital service accessed through WhatsApp, which is less expensive (no commission) provides instant payments and creates a sense of loyalty and belonging
For both, commuters and drivers, a more local solution, which is accessible at a local level and supports the development of local community thus creating a sense of belonging and loyalty
Solution
BUSINESS DESIGN
For this project, tuktuk drivers and commuters within a radius of around 15km (approximate city size of some cities in India) are considered which can be the local community and a cooperative society could be built for this city. Similarly, each city can have their cooperative societies and in the next stages, such cooperative societies could interact with one another and incorporate other options such as cabs, and intercity taxis to provide superior service.
How co-operatives work
Voluntary cooperation of individuals to meet common goals, jointly owned and democratically controlled enterprise. In such an enterprise, individual members are shareholders of the enterprise, and the profit gained by the society is either distributed among the society's individual members or used for the betterment of the society. The society can take help from external parties to create valuable products, services etc. In fact, some of the systems in India such as dairies, and the sugarcane industry largely thrive only because of the cooperative model.
As the cooperative society is run by people chosen from the society, the commission can be reduced to the lowest amount possible enough to run the society. At the same time, it gives a sense of ownership to individual members thus creating a loyal member. For drivers as well as commuters, as it is a local society, it becomes accessible and creates a sense of belonging among them. Commuters will get an opportunity to support and contribute to the development of their local community.
Basic service
INTRODUCTION STRATEGY
How migh we build a community of users, consumers so as to create a loyal & sustainable user flow through the service platform?
After a brainstorming session for possible ideas to introduce the service in the best way and build a community, the ideas were clustered into 3 main themes-
1. Make the service accessible
2. Make the service viral in locality
3. Make the service homely; 'which is discussed at dinner table'
1. Make the service accessible
- Geography- Tier 1 cities
- Customers- College going students, Professionals in desk jobs, Individuals hailing irregular rides
- Channels- Physical marketing more at places from where usually rides are booked. Chai-stalls, local eateries, restaurants, 'no-parking' gates, public parkings, shopping centres etc.
- Offer-
1. The service- a good user experience & accessibility through WhatsApp, QR codes, quick bookings, quick onboarding
2. Marketing at the right places to convert target consumers to consumers. - Stages of production-
1. Partnership with marketing agency to manage the marketing phase
2. Management of actual service - How to win-
1. Value differentiation-
a. being present at right place-right time- when customers want to book a ride
b. Service itself is less costly and accessible through WhatsApp
c. Long term interaction through marketing
2. Price differentiation-
No commission leads to cheaper services for consumers
2. Make the service viral in locality
- Geography- Tier 1 cities
- Customers- College going students, daily commuters, irregular hailers who are active on social media as well as interested in social events
- Channels- Social & physical media.
Social events organised by co-operative, Content creation on cooperatives social media handle, collaboration with content creators - Offer-
1. The service- a good user experience & accessibility through WhatsApp, QR codes, quick bookings, quick onboarding
2. Content curated by cooperatives-
a. Stories of initiatives for social development distributed through digital social media
b. Content creators distributing cooperative's brand to potential customers
c. Tuktuk drivers acting as content creators
d. Tuktuk rides acting as content creators- 'share your experience with us and get 10% discount on the next ride' - Stages of production-
1. Partnership with marketing agency to manage the marketing phase
2. Management of actual service
3. Conent creation and distribution - How to win-
1. Value differentiation-
a. Stay relevant and fresh through new content shared frequently through social media
b. Through social activities, support social development (such as medical camps, educational counselling support, administrative support etc.)
c. Create accessible brand through social media recall, news, trends etc.
2. Price differentiation- No commission leads to cheaper services for consumers
3. Make the service homely
- Geography- Tier 1 cities
- Customers- Families
- Channels- Social & physical media.
1. Media that reaches homes of potential customers (milk packets, newspapers, pamphlets etc)
2. Media that is discussed at dinner table (happenings in locality, word of mouth etc)
3. Through social groups- morning walkers, yoga groups, employee groups - Offer-
1. The service- a good user experience & accessibility through WhatsApp, QR codes, quick bookings, quick onboarding
2. A socially aware brand that creates long lasting impression through its activities, initiatives, marketing that reaches homes-(QR code fridge magnets, QR codes on milk packets etc)
2. Content curated by cooperatives-
a. Stories of initiatives for social development distributed through digital social media
c. Tuktuk drivers acting as content creators
- Stages of production-
1. Partnership with marketing agency to manage the marketing phase
2. Management of actual service
3. Partner with socially active groups- NGOs, activists etc. - How to win-
1. Value differentiation-
a. Create lasting impression to promote socially aware image
b. Build accessibility through marketing on daily use products
c. Support local development through projects, welfare activities etc.
2. Price differentiation- No commission leads to cheaper services for consumers
Testing the assumptions
For each of the possibilities, 'what would have to be true for....' questions to uncover underlying assumptions were created. Through guerrilla tests, these assumptions were tested for basic understanding.
Insights from the research show that-
The role social media plays is significant
1. More than 50% believe social media is the place to introduce the next service
2. Most of the younger generation feel connected to their local community through social media
The younger generation is socially aware
1. More than 70% say that they share and discuss good initiatives with others; almost everyone wants to know more about the activities in their locality
2. More than 80% feel promotion and awareness efforts for social development activities are not sufficient
3. More than 50% say they are physically active in their local community
They are value driven
1. They don't care which company services they are availing; they prefer to select the service with compelling value proposition
2. Their choices remain unaffected by influencers, demonstrating a resistance to external influence.
More exploration is needed with wider audience
1. Dedicated research on a pilot scale is needed to truly understand values consumers are looking for
2. Input from more potential customers is needed to decisivelu take a stand on strategy.
More updates-
India has around 8 lacks (0.8 million) cooperatives registered mostly in agriculture, banking and other sectors. When it comes to cooperatives for tuk-tuk drivers, the number is really less (20-30). The industry is really decentralised with multiple tuk-tuk drivers unions in one city. Each union has around 50-100 rickshaw/tuk-tuk drivers. We understand it will be beneficial to start with an existing cooperative society and so, we are in the process of proposing such a new service to the cooperative society.
ONDC platform- Open Network for Digital Commerce is a new platform initiated by the Indian government to fight commerce platforms and allow any business to use the platform at really cheap commission rates thus eliminating the need for platforms for commerce having high commission rates. Currently, the platform is in a pilot stage and plans to charge a commission from 1% to 8% to host a service on the platform. Currently, the WhatsApp business platform is not integrated into ONDC.
Namma Yatri in Bengaluru, India successfully launched a cooperative society and built a service to serve riders in Bengaluru. Currently, they have 25% market share in Bengaluru market. Although the business faces some problems such as low fares for drivers, technical glitches, user experience issues etc. The business also faced issues due to incongruence between Auto Rickshaw/tuttuk unions and corporate entity holding the business.
Following New-York model, Amsterdam is also planning to implement decentralised network for cab drivers. To solve the issues of transparency and trustworthiness, companies are exploring the use of blockchain technologies.
Blockchain could be a solution to the problems such as transparency, faced by co-operatives as well.
We are exploring more options to work out both WhatsApp business platform and exploring new opportunities with blockchain to address cooperatives problems. Please get in touch with me to know more about the project or if you wish to support the journey.
This project was also a part of Business Innovation certificate offered by IDEO. The certificate is achieved after completion of Business Design course and Strategy Design course.
