From left: TruckEasy founders Nikhil Thomas, Avinash Achar and Vikram Kodgi | Photo: Saggere Radhakrishna
In 2014, when cab aggregators Uber and Ola were gaining popularity, Nikhil Thomas, who was handling the logistics department of Tata Motors for south India, was on the road to introduce the same concept for the trucking industry. He knew inside out of the logistics business and understood the inefficiencies and opportunities in the segment.
At Tata Motors, he was struggling for an organised intracity player for transportation. Whereas he had contractors and carriers for intercity transport, there were no players who had a fleet of vehicles for intracity movement. Vikram Kodgi, who was also working with Thomas at Tata Motors had a similar approach towards the unorganised trucking industry. However, organising the sector could only happen on the back of technology. Hence, Avinash Achar, who was Kodgi’s friend and had worked with start-ups in Silicon Valley came on board. These three minds got aligned and TruckEasy, a commercial vehicles rental, was launched in 2015.
Tata Motors recently picked up 26 per cent stake in the Bengaluru-based firm, a first stake buy for the Tata Group’s flagship company in any domestic start-up. With this, the $45-billion conglomerate opens new avenues for TruckEasy to access its dealer partners, sales outlets and financing markets. Girish Wagh, president-Commercial Vehicles Business Unit, Tata Motors, said, “TruckEasy is promoting entrepreneurship among transporters and providing them with a stable in-come. The start-up has grown manifold due to its partner-based module and outstanding service to its customers.”
Intracity logistics is a highly fragmented segment. TruckEasy through its tech-based platform is making small commercial vehicles available for anyone who wants to transport goods within a city in 30 minutes. According to data, the logistics market in India stands at $350 billion. Even though there are some other players such as Porter, Lets Transport and Blowhorn, all these together do not tap even 1 per cent of the market. “There’s room for multiple players and the one who consolidates will sustain. We do not want to make it an Ola vs Uber fight,” said Thomas.
With ample opportunities, come many challenges. The company, which has been growing at 25 per cent q-o-q, started with limited resources. “The biggest challenge was convincing drivers as we were not approaching drivers with an Ola or Uber brand,” said Thomas. However, once the ball started rolling and the few drivers gained confidence, they started referring the company to others, he added. That’s how it began building up the supply, and today has an 8,000 strong clients list.
The company has various plans suiting each business type. The parameters of each plan is a combination of distance, time and the type of vehicle the clients choose. Its business is divided into two categories: planned and unplanned. For planned business clients, who have fixed loads coming in and need a dedicated fleet, the transaction happens on a contractual basis. The unplanned business clients such as retailers or consumers can book a vehicle on the app just like booking a cab and get access to the truck within 30 minutes. There are two apps — one for the driver partner and the other for the customer. The company has over 3,000 drivers on its platform, of which around 500 are active on a daily basis in the unorganised business and 300 in the organised business for clients such as Amazon, Flipkart and BigBasket. Drivers have the flexibility to login as per their convenience. The company shells out around 90 per cent of the revenue to drivers and keeps 10 per cent as commission.
TruckEasy is looking to get Ebitda profitable in its current market, Bengaluru, in one year. The company will extend its services to Tier 1 cities in south India, including Hyderabad and Chennai, and also invest in the tech platform to bring in more efficiency and better service levels using machine learning.
2015: Seed funding from Tata Motors’ dealers partners
July 2018: Tata Motors picks up 26 per cent stake in the start-up at an undisclosed amount
Area of business: Intracity transportation services
Expert take: Good platform for intracity movement, not interstate
Such a platform is good for intracity movement of goods. These are connecting people in the tapered roads of towns and cities as producers need mobility to reach their products to the narrowest of lanes. Such a model is filling the intracity transport gap and bring a lot of relief to the people as goods are not damaged and remain fresh while reaching the customer.
For local movement, clients are mostly independent truck owners who are willing to be on such a platform as the vehicle remains within the eyesight of the owner.
However, interstate models are difficult to work as the transport brokers have a strong grip on truck operators. Also, small truck owners would not take the risk of keeping their vehicles out of sight for days for interstate movement.
The caution list is long for a TruckEasy-like platform. Irritants such as the value of goods, quantity of the goods and risk of theft need to be ironed out. Also, freight issues have to be crystal clear.
SP Singh, senior fellow and coordinator, Indian Foundation of Transport Research and Training