A website that reveals how much auto drivers earn each day. A hackathon to crowdsource tech ideas to reduce costs and improve the experience. And a tie-up with India’s Open Network for Digital Commerce (ONDC).

In today’s Finshots, we look at how Namma Yatri, a new ride-hailing app, is looking to disrupt Ola and Uber.

The Story

In November 2022, autorickshaw drivers in Bengaluru rebelled. They launched their own ride-hailing app to beat Ola and Uber.

You see, auto fares on Ola and Uber were bonkers at the time. A 2 km ride cost nearly ₹100 while the actual base fare in Karnataka was pegged at ₹30. The state government realized it had to do something and threatened to ban these apps. Obviously, the aggregators quickly revised the prices downwards.

But the anger at these companies had reached a boiling point by then. The exorbitant commissions were eating away the earnings of auto drivers. And as a workaround, auto drivers began to ask customers to cancel the ride and pay them money ‘off the app’.

But there was a minor speed bump. Some customers still liked the safety features they got on the app. Such as tracking. And if things went wrong, they had a platform to complain to. Going offline meant both of these bits would be stripped away.

So, for the auto drivers, the only way out was to create a rival app. One that could take on Ola and Uber but without the middlemen. Where the auto drivers would be in control of prices and get to pocket all the money.

That’s why Namma Yatri was born!

And in the past 5 months, it claims to have onboarded 49,000 auto drivers and 5,50,000 users. But most importantly — it says that nearly ₹12 crores have been paid out to the drivers.

At the moment, it seems like Namma Yatri is disrupting the incumbents. It’s making inroads where others, such as a government-run taxi and auto app in Kochi, have failed. But can Namma Yatri really win the war?

Well, it’s too soon to tell. But let’s lay out a few things that we found.

For starters, a clarion call saying “support our auto rickshaw drivers” isn’t really compelling to the users. Because very few people in Bangalore have a soft spot for auto drivers. Almost everyone will have a horror tale or two to share about their auto rides — No meters, exorbitant fares, and rude drivers.

The only thing that actually matters to them is low prices. And at the moment, that doesn’t really seem to be Namma Yatri’s strong suit. When we checked estimates for different places across Bengaluru for a couple of days, the prices were always 15–25% higher. Uber and Ola were both cheaper.

Also, while we started the story by saying that the auto drivers launched their own app, it’s not completely true. There’s a payments technology company called Juspay that’s behind it. And Juspay has plenty of VC investors. You’d imagine that they’d be looking to make some money off of this, right? Or at least recoup their costs.

And their future playbook for monetisation seems to be charging a subscription fee from the auto drivers.

Now it’s a little hard to imagine that a subscription fee will work. Because Indians typically don’t like paying for subscriptions. We don’t mind if there’s a commission that gets cut directly. But paying out of pocket is hard. And maybe Juspay will simply auto debit the fee from the daily earnings of the drivers. We don’t know. But you’d assume that if that happens, auto drivers will start charging a higher convenience fee — tack on the ₹30 upper limit. And the fares will rise even further in such a case. People won’t be happy.

The other thing is that even though it shows 50,000 drivers have registered on the platform, after tracking the live stats on the app for 3 days, it hardly ever exceeds 9,000 drivers being live concurrently. Which begs the question — where are the other drivers?

Maybe they aren’t getting as many booking requests on the app yet. And they prefer to ply the roads in the hope of a ride. Or simply remain with Ola or Uber for now.

And if you put these things together, this might explain the conversion rate of around 20% in Bengaluru. The conversion rate simply means that only 1 out of every 5 people who look for an autorickshaw eventually complete the ride. Are these folks who’re just testing the waters or genuine riders who’re put off by the higher prices and longer wait times? We don’t know.

Also, to truly make a comparison, we’d need to know what’s the conversion rate for Ola and Uber autos. But we couldn’t find publicly available information. And since the goal of Namma Yatri seems to be to hit the 50% conversion rate, let’s just go with the assumption that the current conversion rate isn’t worth writing home about.

But the folks behind Namma Yatri have realized that they quickly need to cut costs. That’s the only way to lure people in. So they launched a hackathon last week. They want to crowdsource a whole bunch of ideas from Bengaluru’s tech brains.

For instance, one of the problems they’re looking to address is how to cut down on payments for maps. See, unlike you and me simply firing up the free Google Maps to navigate the roads, businesses don’t get it for free. If Namma Yatri wants accurate maps with auto-complete locations that can accurately calculate fares they need to cough up the money. And apparently, nearly 80% of the current operating costs of the app go towards paying the map providers. They’re now hoping someone in the hackathon will have a novel idea to reduce these costs drastically. And that will eventually trickle down to the users.

Also, Namma Yatri might have just got a boost with its tie-up with India’s Open Network for Digital Commerce.

Remember ONDC?

Just think of this as an open-source platform launched with the backing of the Indian government. The goal is to help you find every retailer on every e-commerce app. It doesn’t matter whether they’re only on Flipkart. Or Amazon. If these platforms tie up with ONDC, their sellers will be available everywhere.

And this can happen even in mobility. For instance, it’ll even allow Paytm and PhonePe to integrate Namma Yatri seamlessly into their apps too. The reach could increase exponentially.

Anyway, while everyone’s rooting for the success of Namma Yatri, just know that history hasn’t been too kind to union-owned taxi apps. In 2016, a union of kaali peeli (black and yellow) taxis in Mumbai decided to launch an app. They even offered discounts. But failed. Around the same time, a few taxi drivers in London had the same idea to save their black cabs. They asked drivers to pay a subscription fee. It failed too. The ride-hailing app graveyard is littered with such examples.

Will Namma Yatri emerge successful? For the sake of the experiment, we certainly hope so. What do you think?

Until then…

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