[kamaal]

My father is a cab driver and your Math is way off course. In order to break even, Cab drivers and most travel agencies offering cab services use a mix of fare systems. If you are hiring a cab for a day, the cab fares are mixture of 'time' and 'distance'. For example, there is a minimum half day charge for 4 hours or 40 kilometer, or multiples of that plus any additional billing for extra kilometers driven.

Tourist cabs are charged separately.

Autos are far far cheaper than any cab you can hire. But the margin of profit in Autos is way less, so the general quality suffers.

The reason your Meru's, Ola's or even Uber can offer cabs for so cheap is they raise enough money to operate on losses. Bankruptcy is pretty common in this business. Every time I talk to my father about a new cheap travel scheme, he only asks me to wait for their imminent demise.

We've been in this business for quite some while to understand how this stuff works. If you wish to understand how sustainable cab business work, have a talk with the office cab drivers. You will get a peek into the life of people who sleep for barely 5 hrs/day and drive 300Km/day to make a living on 12000 rupees a month. All while charging a good deal to travel agencies.

Autos are going to make a killing. If you are thinking you are going to invest your way in to this market, then you are going to be in for a surprise.

There is a saying in my native tongue(urdu): "If you wish to destroy a person's life, get him to start a travel business'.

[ad93611]

The Math is correct. Those are the current prices. You are saying that Olacab like companies are able to afford to have low prices because they have investor money to operate at a loss. That may be true too. Yes, it will be interesting to see who can hold on for longer.

We have a reached a stage where rickshaws and cabs are competing for the same market segment, within the city.

[kamaal]

I have seen at least 3-4 cycles of travel companies going bankrupt in as little as the last decade. The general attitude is that they think once they acquire monopoly by offering cheaper fares, then they can charge what ever they feel like.

But the story always is every time they get close to even say 5-10% of the market share some launches a competing service. By then you have lost too much money to make any thing meaningful out of it.

>>We have a reached a stage where rickshaws and cabs are competing for the same market segment, within the city.

If money isn't a concern for you, then that is true. But for anything less than 40 km of travel or a 4 hour hire, Autos will win by a big margin.