Tuesday, March 05, 2013

Virtual Cars for Everyone

Imagine a car being available to you practically anywhere at any time. Why not create an app for making this dream a reality not only for yourself but for millions of your customers, assuming that you have the entrepreneurial drive!
Let us visualize what the customer should get. He taps on his app, enters the starting location and destination and gets a car to pick up him up somewhere within 5-30 minutes if he wants. Or he gets the car at a specified time and date of his choice. He gets a confirmation message soon after the booking. Another tap and he should be able to talk to the driver of the assigned car. He gets a frequently updated display showing what the status of the assigned car is and when it will reach him. Cancellation is easy. Prior registration makes personalization easy, recording relevant addresses of the customer, phone numbers, etc. Ideally the system should be able to charge customers’ credit card, without introducing any security risk.

What is new about this? Most of the features mentioned above have been made available by different taxi-booking systems. Recently Meru Cabs announced their “app”, but it turned out to be link to their website! I would prefer an app, so that all interactive data entry can be done quickly, irrespective of the quality of mobile data signal the customer gets on his cell. I don’t mind if the cell phone has to take a few minutes to send the information over a poor data channel to the server.  

The key issues, as I see it, are quality of the human computer interaction, the number of useful affordances, and the overall efficiency the user gains by using the tool. I rate simplicity as an important quality of a Human Computer Interface.

Students who want to program an app for a project in this area can do it. Other students who want to set up mobile-optimised websites can also do that.  But both these groups would need to design and implement the back-end that will run on the server. Servlets running on some cloud infrastructure such as the Google App Engine would be a good way to start.

I should not forget the entrepreneurially motivated student who wants to try the business possibilities of this system either in a company or in a start-up. The rest of this posting is designed for students of this third category.
What will you give the customer that an airport taxi-hire service does not give? My answer is: a highly reliable, nation-wide, general purpose system, offering quick response. It will never say “no vehicle available” because you want to do a short trip!

Scale is everything here. You might have to start small, but you must know either you will grow fast to be huge company or will have to sell out sooner or later! Why is size important? Unless the customer believes that you will meet his need practically all the time, he will laugh at the idea of a virtual car. This means to me that system should make a car available to him 95% of the time within 15 minutes, and 99% of the time within 30 minutes. Such reliable response should cover the whole region in which the company operates. Not having such demanding requirements would make it easier and less expensive to build a company, but will keep you out of the big league.
Look at the size of the potential market http://www.siamindia.com/scripts/industrystatistics.aspx

Approximately two million passenger cars were bought in 2012 in India. This suggests that our entrepreneurs should plan for a market of something like ten million regular customers to be built over a ten year period. At estimated revenue of Rs 10,000 per customer, we are talking about a market of Rs 10,000 Crores in the tenth year! On this scale, the company should be able to provide its customers with an experience superior to that of owning a chauffeur-driven vehicle.

I am not going to discuss what should go into a business case at length, but will mention a few key points.

The pleasure of driving one’s own car is very important to many people. Over a course of time, the Indian road environment will improve, along with the country’s legal infrastructure and law-enforcement. There will be logic then in providing for use of self-driven vehicles as an alternative to the chauffeur driven vehicles. The customer could pick-up/drop the vehicle at fixed places, or he might even have the vehicle driven to his door by a company driver. The ability to use either system as required would be a big attraction to the customer. For an example of a system based on self-driving, visit http://www.vrtucar.com/

Secondly, you don’t need to buy a huge fleet of cars to run this operation. The industry has successfully shown that you can work largely with driver-owned vehicles, arranging bank loans for drivers. This franchise model leaves the owners of the parent company essentially running an IT based operation, having the bulk of its employees handling only managerial responsibility. The exercise of planning out a company of the kind visualized above should be interesting to management students.

What is most exciting about the virtual car system?  It has potential for job creation and for improving the quality of life for millions.

Srinivasan Ramani 

1 comment:

Srinivasan Ramani said...

You might wish to visit this site:

Give up your car!