News: Meru Cabs to focus on corporate employee transportation

Employee Relations

Meru Cabs to focus on corporate employee transportation

Following a 30 to 40 percent dip in revenues and rides, Meru cabs is now planning to sharpen its focus on B2B clients, which includes corporate employee transportation
Meru Cabs to focus on corporate employee transportation

Mumbai based ride hailing company, Meru Cabs is looking to expand its B2B offerings, to address its falling revenues, as it competes with players like Ola and Uber.  The company is aiming to move forward from earning 40 to 45 percent currently to 70 to 75 percent of its revenues from B2B model. 

Neeraj Gupta, founder of Meru Cabs, said, “The best viable option for us is to focus on B2B. We are looking at a three-year time frame where the model will shift from a B2C business to a B2B business. Eventually, it will keep on growing much faster than B2C for us.”

The shift in focus has been caused by a loss of market share as Meru’s revenues and rides volumes dip by 30 to 40 percent in the past few years. Although the firm has not yet filed its financial returns for the financial year 2017, but industry watchers say the company’s revenues have fallen both in the financial year 2017 as well as in 2018. According to experts capturing the B2B market will help Meru not just survive but it will also provide it a competitive advantage as Ola and Uber are busy catering to the B2C segment.  

Recently, the corporate employee transportation ecosystem has been booming in India. Shuttl, an app based office Bus Service is working to solve the office commute problem using technology and Aaveg Management Services, a New Delhi based venture has also taken the initiative to innovate and organize corporate transportation across the country. 

Employee transportation solutions are not only cheap and safe but are also good for the environment as they facilitate the transportation of a large number of passengers. Given the issues and limitations of the public transportation backed with lack of infrastructure and passenger safety, corporate transportation can be seen as an emerging trend. And Meru with its current capabilities can leverage the scope of this evolving sector to gain its competitive edge. 

As part of its growth plan, Meru will also aim to increase its fleet four times to about 20,000 over the next five years for its B2B model.  It will use the same to serve its B2C customers as well. 

Currently, PE firm India Value Fund Advisors holds an ownership stake in Meru at about 87 percent but it is planning to completely or partially exit its investment through an impending fundraise. Now, as it looks to create and retain market leadership in the B2B business, Meru has also been in talks with several strategic investors to raise $20-25 million. 

Topics: Employee Relations

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