All radio cab operators run their fleet either on CNG or diesel. "As stipulated by the government, we will continue to charge Rs 15 per km anywhere in the country where our services are available.
Any price change in the radio cab services has to be approved by the Delhi government," said Rajiv K Vij, managing director, Carzonrent, the operator of Easycabs that provide round-the-clock services in Delhi, Mumbai, Hyderabad and Bangalore.
Radio cab operators say the inability to pass the hike of Rs 3/litre in diesel prices would result in a loss of approximately 20-25 paise per km (on an average, it costs radio cabbies Rs 3 to travel a kilometre on diesel vehicles and Rs 1.20/km on the CNG-run ones.) Fuel prices in Delhi are the cheapest than any other metro.
The two-year-old radio cab industry, which is expanding its network across the country, is not hopeful of a price revision. "Next week, we plan to present a petition for a price revision to the government.
Even if we are allowed to raise our fares by 5 per cent it will help," said Neeraj Gupta, managing director of Mumbai-based V Link, which operates Meeru Radio cabs in four metros, including Mumbai.
On an average, fuel constitutes 18 per cent of the radio cabs' operating costs, while vehicle cost (including depreciation and loan interest) comprises 22 per cent, and driver's salary about 17 per cent.
The remaining costs are incurred in control room operations, administration and marketing expenses. Some operators like V Link run their fleet on a franchisee model where the chauffeur owns the car and bears the fuel bill.
Meeru and Easy Cabs maintain that on a fleet of 1,500 vehicles the ratio of CNG- and diesel-run cabs are approximately 6:9.
The size of the industry is pegged at 5,000 cabs and is forecast to go up to 50,000 in two to three years, expanding their footprint across 10 state capitals and in almost every major tier-2 town.
Operators like Meeru and Easy Cabs, who predominantly use mid-size cars, prefer partnerships with car majors like GM, Honda, Toyota, Hyundai, Ford, Mitsubishi, Tata Motors and Maruti Suzuki. The size of an order could be in the range of 100-500 cars. "Depending on the volumes we order we are able to negotiate corporate discounts," said Vij.
With inadequate public transport system in most metros, state governments over the last two years have put in place policies that make it attractive for unorganised taxi operators to graduate as radio cab operators.
This has, of late, attracted a clutch of private equity player like SIDBI, Sequoia Capital and IFV Advisors.
