Story of TAXI FOR SURE

TAXI FOR SURE was eventually acquired by Ola Cabs, but it surely became a failed start-up even after being in the game for more than 3 years. They had the a few first mover advantages but couldn't capitalize on them in time. This coupled with certain social situations in India put the final nail in the coffin of Taxi For Sure.

TAXI FOR SURE!

It was actually India's first Taxi Aggregator and was founded by Raghunandan G and Aparmeya Radhakrishna. They started way back before Ola in 2011. For a company which was the pioneer in the taxi aggregation market in India. Even without any competition for 3 years the company couldn't actually leave a mark. Things started to turn sour due to various factors. From what I have read and understood these maybe the following reasons why this start-up failed.

1. Pricing war with Ola/ Funding Deficiency

Taxi For Sure (TFS) had the monopoly in its business for quite some time. But then Ola entered the competition and started garnering truck-loads of funding. This funding was used by Ola to give heavy discounts to the passengers and huge incentives to their drivers. Ola had raised about $210 million from Softbank in October 2014. In contrast TFS had raised only around $26 Million during its existence as an independent company. Ola took leverage of this funding to offer heavy discounts and incentives. It came to a point where various taxi operators with the devices of both the companies, kept TFS devices off and preferred Ola.

The problem was further compounded by the fact that Ola was offering rides at lower prices than auto-rickshaw fares.  As a knee jerk reaction, TFS also decided to jump in with rates lower than Ola. This ate into their cash reserves and they made losses for each ride. The losses kept escalating further every month as the number of rides also increased. At one point TFS was transacting thousands of rides and losing ₹150 for each ride. Their daily losses were to the tune of ₹36 Lacs.

2. Lethargic Expansion

Taxi For Sure was a company which started operations initially in Bangalore and few other metros. And it feels as if they were comfortable with this. Then came Ola and wrecked the party with their aggressive expansion in the later half of 2014. Ola expanded even into 2-3 tier cities, without a mention their huge funding helped them again.

Looking at their competitor TFS also started their expansion campaign aggressively albeit with a much lesser funds at hand. This added to further evaporation of their funds.

3. Bad Timing & Govt. Regulations

The TFS team realized the need for funding and started approaching new VCs for the same.  They were assured additional investments by various investors but then the Uber rape case occurred. Thus their meetings with the investors were futile. From the hot commodity they suddenly became the untouchables.

The lack of Government  Regulations on the taxi aggregation business became a curse for them as the investors dried up. In the aftermath of the rape case, government decided to ban this business model, which it eventually never did. But this made matters worse for TFS. Most of the investors were wary of pumping money into something which was not regularized. There was a general public wave against the likes of Ola, TFS and Uber.

4. Excess Workforce

There were reports that both the TFS competitors, Ola and Uber were in the fray for acquiring them. The founders though weren't very keen on going ahead with Ola. TFS at that time had a workforce of about 1800 across locations in India. Uber meanwhile had a Global Workforce of 800 odd people. Thus Uber wasn't very keen on taking up this excess baggage on their shoulders.

Ola remained the only option and thus the deal between them was sealed. Ola shelled out around $200 million to acquire Taxi For Sure, which was way over their initial funding pegged at $26 million.

Many people have suggested that the acquisition isn't possibly a failure of Taxi For Sure. Even the deal seems fair enough. But TFS has already ceased operations in around 22 cities across India. Its customers have been migrated to Ola. So there is a probability that the Taxi For Sure brand might be completely killed by Ola in the near future. Hence as the brand would completely vanish from the public eye, we  could call it a failure. Just that the failure came gradually rather than being abrupt.

Credits:quora