Sivasankaran-backed new taxi aggregator app launched in Chennai

UTOO will be competing with the taxi aggregator app businesses such as Uber and Ola

Serial entrepreneur C Sivasankaran, who founded telecom firm Aircel, has entered the app-based on demand taxi business by backing the Chennai-based start-up UTOO, competing with the taxi aggregator app majors Uber and Ola. The technology venture is initially backed by funding from his close friends and family, he said.

Speaking about the venture, Sivasankaran told reporters that he was satisfied in all the four parameters required to enter into the business - the customer, profit, competition and focus in business, which led him to enter the business. He said that he likes competition and it helps to deliver the customers better and helps to innovate.

 

"When I started telecom, mine was the only company in the world to never charge any customer for receiving the call," he said.

He said that he is thankful to Uber and Ola for creating the market. UTOO will match the lowest price of its competitor and will offer quality services. It will not incentivise the customer or the driver and will have a "no surge" policy at all times. He said that the goal is not to have a major market share in India, but to have sustainable business making profit quarter by quarter.

While refusing to put any specific number to the initial investment, he said that it would invest around Rs 350 crore to 1,200 crore depending upon the requirement. 

UTOO, which has seen a soft launch with 180 cars today, will have a starting fleet strength of 1,000 cars in Chennai, which the company is planning to buy to set as an example. The company is particular that it will run only 2016 model of vehicles and will have specific safety and quality standards including for the driver. Once the standard is set, the drivers can take over the car from the company, depending upon the business.

Plans are to scale up the network to nine cities with atleast 100,000 cars in the first phase and an additional 180,000 cars in the second phase covering 104 cities. The company has plans to complete the first phase in four months and the second phase in 18 months, it said. The cities where it would expand after Chennai would include the other metro cities, Bengaluru, Pune and Jaipur.

He said that the company will come out with more announcements about its services and will have innovative models to benefit the customers. The cars in its services include Nissan Sunny in the sedan category, Toyota, Mahindra and Nissan models in the SUV and it will also have a smaller category which is being contemplated at present.

UTOO drivers who will be trained on English and etiquette, will be uniformed and the company intend to roll out a customer loyalty programme.

K V Baskaran, who ran Aircel earlier andcurrently the Chief Excecutive Officer of the company, said: "We have studied the Taxi hailing business and the competitive landscape over the last year. I am confident that UTOO business model will remain loyal to its objectives, which is to serve the commuters with better rides, driver partners with fair and equitable returns for their time and effort."

With the taxi hailing business in India growing at over 20-25 per cent annually, the organised sector accounts for just four to five per cent of the industry totalling $800 million, which is expected to grow to $7 billion by 2020, said the company.