IT, ITeS boom drives cab business in Hyderabad

Time for some number-crunching. Deloitte hires around 200 cabs in the city each day. Microsoft manages with around 15 and Satyam Computer Services Limited suffices with 10 on a daily basis.

This amounts to more than 1,000 cabs being used by just three entities in the city, in a week comprising six working days.

Many of the IT and ITeS companies hire cabs to pick up and drop their employees or guests in the city, bringing to the fore the fact that chauffeur-driven cars no longer seem to be a luxury.

And incidentally, these chauffeur-driven cars are not the mundane black and yellow taxis but range from utility vehicles like Qualis to even luxury cars like Mitsubishi Lancer. Needless to say, these employees and guests travel in style.

Says Rizwan Hyder, who manages Noori Travels, "We have stopped using ambassadors because customers do not like bulky cars." Noori Travels has 300 clients as on date.

Ask him which car models are popular today and he rattles off, "Tata Indica, Mercedes-Benz, Honda City, Corolla, Lancer and Ford Ikon." In fact, Microsoft restricts the car models that they use to Indicas and Taveras for the entry-level or middle-level employees to Corollas and Lancers for the high-level employee fraternity. The IT major uses cabs only for guests and employees who have relocated to the city.

"The IT and ITeS segments have given a big boost to the cab business. In fact, the demand for cabs today is so high that many small operators owning just one car are also trying their luck in this business," he adds. According to Hyder, there are at least 300 cab operators in the city today. Noori Travels has been in the cab business since the last 33 years and has 155 cars at its service.

Rukesh Patel, manager of Vijay Travels agrees, "Because of the huge demand from IT and ITeS companies, we have increased the number of cars to 63 from 40 two years back. Besides, this year we will be buying 20 additional cars." Vijay Travels has around 70 clients with a large number being from the information technology segment.

Says Sridhar Maturi, general manager, corporate services, Satyam Computer Services Limited, "We hire 20 buses on a daily basis for picking up and dropping around 800 employees at designated locations. We use luxury cars only to pick up our customers and guests from airports for instance."

Deloitte, on the other hand, hires around 200 cabs per day. In fact, according to an employee with the company, the demand for cabs is so high that it is sure to outstrip the supply in future.

"We ourselves have around 2,000 employees and may grow to 5,000 in a couple of years from now. So there is likely to be a shortage of cabs in future," he says, adding that even now they cannot suffice with the services of one cab operator because of the large number of cars that they need on a daily basis.

Hyder from Noori Travels, however, believes that at present there is no shortage of cabs in the city. He, in fact, rues that the going has become tough for many as "there are too many in this business leading to a squeeze in the margins."

"We sell our cars every two-and-a-half years. This means that we need to invest more in new cars as well. The small operators buy second-hand cars and manage to successfully run their business," he explains.

Incidentally, Hyder also says that they haven't been able to change the tariffs in the last two years. "Rates of petrol and diesel have been on the rise but our clients are not willing to pay more," he says, adding "honestly speaking, we are just managing to break-even."