V-Link set to ramp up its radio taxi fleet.
May 22, 2008 7:27 PM
The company is looking at raising Rs. 500 cr through debt and equity - Robin Ghosh, Mumbai
V-Link Taxi, which operates the Meru brand of radio taxis in Mumbai, plans to increase its fleet of taxis across the country to 3,500 by the year end, from about 1,600 today.
The company, wholly owned by Mumbai-based V-Link Travel Solutions, also provides taxi services in Delhi, Bangalore, and Hyderabad.
It launched its services in Mumbai with a fleet of 50 cabs in April last year. Today, it has 500 vehicles in Mumbai and Bangalore each, with another 400 in Hyderabad and 200 in Delhi.
V-Link Travel Solutions also has a BPO pick-up and drop service under V-Link Fleet Solutions.
Neeraj Gupta, managing director, V-Link Taxis, said by the end of this year, Mumbai would have 1,500-2,000 Meru cabs, while Bangalore and Hyderabad would have 700-800 cabs each and Delhi another 400-500.
"In three years, we plan to have 6,000-6,500 vehicles and over 10,000 vehicles in five years. We are evaluating a strategy of entering Chennai and Pune and may enter those markets by October," said Gupta.
The company is looking at raising Rs. 500 crore through debt and equity to fund the plan, he added.
Meru was launched with seed fund from India Value Fund (IVF), which holds a majority stake in the venture and has also invested in ventures such as Radio City and Trinetra Retail.
Gupta said the company would raise equity capital from IVF.
He said the venture would reach a breakeven stage when the fleet size reaches a critical mass of 4,000 cabs.
The company, though, plans to steer clear of the rent-a-car segment.
According to Gupta, it has managed to overcome the issue of permits in Mumbai, where no new taxi permits have been given since 1996. The company leases permits from existing black-and-yellow taxi permit holders and replaces the old vehicles with new ones.
But, it has a tougher job at hand. "Permit is not an issue in Mumbai any more," said Gupta. "Our challenge is finding the right mould of chauffeurs."
The company's business model involves acquisition of a vehicle and giving it to a chauffeur to operate under a franchise model. The chauffeur may or may not be the original permit holder; he pays for the fuel, while the company does the maintenance.
In other cities, V-Link has managed to get fresh licenses issued.
Gupta said the company has invested Rs. 25-30 crore in technology from Singapore. This allows users to call for a cab through phone, SMS or internet.
Firm plans to have 6,000-6,500 vehicles in 3 years and over 10,000 in 5 years
By year end, Mumbai would have 1,500-2000 Meru cabs, Bangalore and Hyderabad 700-800 each and Delhi 400-500
It is evaluating a strategy to enter Chennai and Pune.