M&M's Meru Mobility Tech planning to focus on corporate commuter segment

Like most of the other ride hailing firms, which went out of business due to the lockdown, Meru also got into the delivery of essential services to survive the lockdown

Meru Mobility Tech, which operates Meru Cabs, is scripting a new story.

Within a year of being acquired by the Mahindra group, the ride-hailing company, one of the earlier entrants into the radio taxi market, is looking to tap the corporate commuter segment in a big way.

The company’s founder and managing director, Neeraj Gupta, said the company was not keen on competing in a segment dominated by ANI Technologies, which runs Ola, or Uber Technologies, which runs Uber, and burn cash for a long time.

The company will rather focus on a niche that remains relatively under-tapped.

“We don’t want to compete in a crowded space because the gestation period for the breakeven is long. The objective is to build a profitable, electric vehicle-led (EV-led) business mobility platform,” said Gupta. 

It is eyeing leadership position in the segment, he added.

The focus on the corporate segment, he pointed out, is based on research that shows a majority of the users of ride-hailing services are company employees and they are hardly used for personal commuting.

In keeping with this focus, on August 15, Meru launched a business mobility application. 

A feature called “Meru Switch” in the application helps users switch between work commute and personal travel with just a slide icon. It claims to be a one-stop solution for business travel, which facilitates companies and their employees.

Within the business segment, EVs will be a big focus area. Of the 5,000 cars in Meru’s fleet, close to 300 are EVs, which will account for 50 per cent of the fleet by 2025, said Gupta. 

This, however, will largely be governed by the economic viability and won’t be done for the sake of it.

The present fleet has been clocking 1 million km a month for the past few months. 

Even as the initial acquisition cost is high compared to an ICE (internal combustion engine) vehicle, the cost of running them is 25 per cent cheaper, said Gupta.

Like most of the other ride-hailing firms that went out of business due to the lockdown, Meru got into the delivery of essential services. 

With cities opening up, business is picking up but it is still 25-30 per cent of what it used to be in the pre-Covid phase, said Gupta, attributing it to restricted travel and people continuing to work from home.

The ride ahead, however, may not be easy for Meru, say analysts. 

“Amid the rising number of Covid cases, whoever has resumed office prefers personal transport to shared mobility,” said an analyst.  

Further, millennials are considering owning their own vehicles. This doesn’t bode well for those who are into shared mobility, he added.

Mahindra, which has indentified shared mobility as its strategic focus segment, bought a controlling 55 per cent stake in Meru, the holding entity, and its subsidiaries in December last year for Rs 201 crore. 

It operated in the ride-hailing segment and corporate transportation solutions space. Incorporated in 2006, Meru was struggling amid increasing competition from Ola, Uber, and others.  

Mahindra’s acquisition of Meru followed the former picking up a significant stake in Zoom Car. 

The Mumbai-headquartered firm has been stepping up its presence in shared mobility’s eco-system through Glyd, the electric vehicle ride-sharing platform, and Smart Shift, the tech-enabled logistics solution provider.