How I Built A 25 Crore Luxury Taxi Startup Called Shoffr | GrowthX Inner Circle
Summary
TLDRIn this insightful episode, Vikas Bardia, the co-founder of Schofer, shares his journey from Kolkata to London and finally to Bangalore, where he established a luxury electric vehicle (EV) cab service in just two years. The company focuses on sustainability while ensuring a premium customer experience. Vikas discusses the significant market opportunities in India's taxi industry, particularly in Bangalore, and how Schofer is leveraging the EV revolution to create a gold standard in ride-hailing services. He emphasizes the importance of a sustainable business model and the power of word-of-mouth marketing in attracting repeat and new customers.
Takeaways
- 🚗 The Bangalore airport taxi market is a well-established and significant opportunity, with pre-T2 opening traffic of over 1,500 cabs and 30,000 daily trips.
- 🌟 Vikas Bardia built a luxury cab service company worth 25 million in just two years, emphasizing the rapid growth potential in the sector.
- 🔋 Schofer is a Bangalore-based electric vehicle (EV) charging service that focuses on sustainability while maintaining a premium customer experience.
- 💡 The inspiration for Schofer came from the founders' personal experience with electric vehicles and the realization of the cost benefits of EVs for high-mileage drivers.
- 📈 The taxi market in India is estimated to be between $7 to 10 billion, with significant potential in airport transfers, corporate travel, outstation, and intra-city services.
- 🚕 Schofer aims to set the 'gold standard' for ride-hailing services by providing a high-quality experience that is both seamless and hassle-free.
- 🛠 The business model for Schofer involves careful financial planning to ensure sustainability, with a focus on recovering the initial investment and generating profit over the car's lifetime.
- 💰 Schofer's revenue model is based on a simple payback calculation, considering the running costs and the time it takes to recover the initial investment in the vehicle.
- 📊 Word-of-mouth marketing has been highly effective for Schofer, with 75% of their revenue coming from repeat customers, highlighting the importance of customer satisfaction.
- 🚀 The next 12 months for Schofer are focused on team building and expansion, which the founder is most excited about and considers crucial for the business's future growth.
- 🎯 The GrowthX Demo Day event is mentioned as an opportunity for startups to learn about revenue models, customer acquisition, and retention strategies, indicating the importance of these aspects in business growth.
Q & A
What is the current size of the Bangalore airport market in terms of the number of trips per day?
-Before the opening of T2, the Bangalore airport market was estimated to have more than 1,500 cabs, with about 30,000 trips happening on a daily basis.
What is the business model of Vikas Bardia's luxury cab service company?
-Vikas Bardia's luxury cab service company focuses on building a high-quality service experience while maintaining sustainability. It aims to be the gold standard in the ride-hailing service industry.
How did Vikas Bardia's experience with the Nexon Eevee influence his decision to move into the electric vehicle (EV) market?
-Vikas Bardia was impressed by the silent operation of the Nexon Eevee and realized the potential cost savings of running electric vehicles due to their significantly lower running costs compared to traditional vehicles.
What is the estimated market size for the taxi market in India, and how much of it comes from the top seven cities?
-The taxi market opportunity in India is estimated to be between $7 billion to $1 billion, with about 70% of this coming from the top seven cities in India.
What is the GrowthX Demo Day, and what can attendees expect to learn from it?
-The GrowthX Demo Day is an event where top GrowthX teams present in-depth growth strategies. Attendees can expect to learn about designing revenue models, understanding customer acquisition, onboarding, and retention.
What is the core insight that led to the creation of Shofer, according to Vikas Bardia?
-The core insight was the realization that many companies building with electric vehicles were using the same model and cars, and that a sustainable business model was needed to scale the service in a financially sustainable manner.
How does Shofer differentiate itself from other ride-hailing services in terms of customer experience?
-Shofer aims to provide a premium ride-hailing service with a focus on a hassle-free ride, including a simplistic booking experience, responsive drivers, well-maintained cars, and personalized in-car amenities like water and tissues.
What percentage of Shofer's revenue comes from repeat users, and what does this indicate about their business model?
-Shofer gets about 75% of its revenue from repeat users, indicating that their focus on providing a high-quality experience has led to customer loyalty and organic growth.
What is the financial model that Shofer uses to estimate the return on investment for their cars?
-Shofer estimates that if they buy a car at a cost of 100, they should be able to make anywhere between 300 to 400 over a five-year life, considering known costs like EMIs and driver salaries, and unknowns like maintenance.
What is the main challenge and area of excitement for Shofer in the next 12 months?
-The main challenge and area of excitement for Shofer is building out a team, which is crucial for the company's growth and development in the next 6 to 12 months.
How does Shofer approach the issue of scaling their business while maintaining a sustainable financial model?
-Shofer focuses on building a sustainable business model that allows for scaling without compromising the quality of the service. They emphasize the importance of financial sustainability over just scaling the business.
Outlines
🚗 Building a Luxury EV Cab Service in Bangalore
This paragraph introduces Vikas Bardia, the founder of a luxury electric vehicle (EV) cab service company in Bangalore, India. Within two years, the company has grown significantly. The narrative begins with Vikas's background, his experience in London's fintech industry, and his eventual move to India. The turning point for Vikas was a personal experience with an electric vehicle, which sparked his interest in the potential of EVs for commercial use. The summary also touches on the financial model of EVs, highlighting the initial higher cost but significantly lower running costs, making it a viable option for high-usage commercial services. The market opportunity in India, especially in Bangalore, is discussed, with the airport transfer market alone being a substantial segment.
🛠️ Establishing a Gold Standard for Ride Hailing Services
The second paragraph delves into the core insights Vikas gained from his research and the business model of his EV cab service, Schofer. He identifies the lack of differentiation in the EV market and the importance of a sustainable business model for scaling. The 'gold standard' of ride services is introduced, emphasizing a seamless and hassle-free customer experience from booking to drop-off. The focus is on improving the existing standards, which were found to be quite low, by ensuring a high-quality vehicle, responsive drivers, and a comfortable ride. The summary also covers the financial aspect of operating the business, discussing the cost recovery and profit potential over the lifetime of a vehicle, and the importance of word-of-mouth marketing, which has been the primary driver of new and repeat customers for Schofer.
🌐 Future Growth and Team Expansion at Schofer
The final paragraph discusses the future plans for Schofer over the next 12 months. The primary focus is on team building, which is both the most exciting and challenging aspect for the business. The company has not invested in traditional marketing, yet it has experienced significant growth through organic recommendations from satisfied customers. The summary highlights the strong repeat customer base, which accounts for 75% of the company's revenue, and the absence of a formal referral scheme, indicating the genuine satisfaction of the customers with the service provided.
Mindmap
Keywords
💡Bangalore airport Market
💡fintech
💡EV (Electric Vehicle)
💡Schofer
💡sustainability
💡market opportunity
💡Revenue model
💡Gold standard of rides
💡customer acquisition
💡scaling
💡maintenance
Highlights
Bangalore airport market has the potential to be more than 1,500 cabs today.
Vikas Bardia built a luxury cab service company worth 25 million in just 2 years.
Schofer is a Bangalore-based EVC service focusing on sustainability and premium customer experience.
Vikas was inspired by the fintech industry in London to move back to India and explore opportunities.
The initial higher price of electric vehicles can be offset by 90% cheaper running costs.
Commercial use of electric vehicles makes financial sense with high daily mileage.
The taxi market in India is well-established with a significant market opportunity.
The airport transfer market in India should be between 1 to 2 billion dollars.
Schofer aims to build a gold standard of ride services with high-quality customer experience.
Schofer's business model focuses on financial sustainability in scaling.
The gold standard of ride experience includes seamless booking, hassle-free rides, and high-quality service.
Schofer has a high repeat customer rate of 75% without any marketing spend.
Building a superior experience was about improving basic standards in the ride-hailing industry.
Schofer's growth strategy involves word-of-mouth recommendations from satisfied customers.
The next 12 months for Schofer involve building out a team to support business growth.
Schofer's financial model estimates a 300 to 400 return over a 5-year car life.
The GrowthX Demo Day is an event for startups to present growth strategies and learn from industry leaders.
Transcripts
so the Bangalore airport Market itself
would have been anywhere easily more
than 1,500 Crowes today we have vikas
bardia who buil a luxury cap Service
Company worth 25es in Just 2 years
schofer is a Bangalore based EVC cap
service solving for sustainability while
maintaining premium customer experience
in this episode we dive deep into three
core insights into how vikas is building
a mega cab
service just walk me through like early
life and how did you end up in Bangalore
so I'm born brought up spoiled in
Kolkata my family is originally from
Rajasthan and I was in Kolkata till I
was 18 before Bangalore I was working in
London I got bit by the fintech bug in
London there was so much happening in
the fintech world in London at that
point in time and India was just kind of
like starting up in that sense
especially in the world of Finance but
the thing was I couldn't find like a
fintech job in London which also
sponsored a Visa okay so at some point I
was like okay do I want to do this and
yeah anyways was like a very big growth
story at that point in time I decided to
kind of like just pack things up there
move back to India and then I moved to
Bangalore to explore I was at that point
considering a few options 2 3 months
later once they closed their series a
basically or just about when they were
uh kind of like join small case so and
how did that transition to EV came what
was that what was that uh uh you know
flow one of my friend was looking to buy
an SUV and he was test driving a bunch
of different cars and we Des drove the
Nexon Eevee and while I had known of
electric vehicles for like a while like
even sold Electric Mobility small case
and all that I had never experienced one
and that experience that sitting in the
car turning the ignition on not even
realizing that the car is switched on
like it was so silent that experience
was wow and with EES there was a simple
thing there was a initial higher price
Delta between the initial purchase but
the running cost is 90% cheaper yeah so
it's a simple map model like how many
kilometers do you run which then
determines how long will it take for you
to recover that 3 lakh and in his case
because his usage was like some th000 km
a month it would have taken him 5 and a
half 6 years to just recover that three
lakh so it didn't make sense for him but
then you're like yeah you know if like
commercial guys run 200 300 km a day if
you are running for 9,000 km a month
suddenly it makes a whole lot more sense
so that was the starting point uh of
moving to EVS or looking at EVS as like
a thing give me like an idea so right
now you guys are at 80 cars what is the
market opportunity in India and maybe
talk by market like you can just talk
about let's say Bangalore as a market
and then expand from there firstly this
is a very established Market let me be
clear in saying that right before Uber
Ola existed there was a taxi market then
ubera came now there are new age
startups coming but the taxi Market has
been around for a really long time it's
not like people are trying to establish
a new market they're just trying to cap
capture a share of that in their ways I
think the taxi Market opportunity in
India is fairly fairly big the numbers
range a lot um from like $7 billion to1
billion but I think it's fair to say
like the airport transfer market should
be between1 to2 billion in India the
corporate travel Market should be around
$2 billion the outstation market should
be anywhere between 5 to 7 billion
market and then there is this inter city
uh intra City on demand sort of a market
which again would be anywhere 4 to5
billion dollar and this is all at like a
national level but about 70% of this
comes from like tier uh top seven cities
in India so the Bangalore airport Market
itself before T2 opened is like would
have been anywhere easily more than
1,500 cres about 30,000 trips happen on
a daily basis uh where one side is the
airport and this is done by like some
anywhere between 7 to 10,000 uh
commercial cars this doesn't include the
buses it doesn't include the private
cars this is just like the commercial
car space the mecca of growth is back we
are hosting the 20th edition of the
growthx demo day and the idea is simple
top growthx teams will present in-depth
growth strategies and over the course of
these pitches you'll learn how to design
your Revenue model understand nuances of
customer acquisition onboarding and
retention the growthx demo day is joined
by Founders product and marketing
leaders of of the startup ecosystem it's
on 28th July and you can join the event
for free but we have limited invites and
it's first come first sub so grab your
online passes quick the link to grab a
pass is in the
description so you did this whole 3 and
a half months of research and you
finally started schofer so tell us about
shofer what it exactly does and what's
the core Insight so shofer is a premium
ride hailing service or a taxi service
if you ask me very simply we are trying
to build a gold the gold standard of r
which stands for a very high quality
service the core Insight that we had
from that 3 three and a half months of
research was the fact that a firstly
everyone who was building with EES was
building it in the same way like using
pretty much the same model same cars all
of it secondly the other Insight I had
was a lot of it is not rocket science
it's just having the right business
model which then allows you to do things
in a sustainable manner like the problem
with this space has never been about
scaling the problem has been scaling in
a financially sustainable Manner and
building things like that anyone can add
100 cars but if you can't do that
sustainably then somewhere or the other
you have to be compromising on the
experience not just for the users but
also for the drivers who are the most
integral part of this uh of of of a
business like this what is the core of
when you say gold standard of Rights
walk me through the value chain here
what does gold standard mean from the
time I even decide to book a Sher to the
time I reach my home or offic whereever
I want to go to see when we started out
um the experience was quite broken not
the digit digital experience like you
could seamlessly book something but it's
the offline where things would break
like you know the driver wouldn't come
or not answer or there would be many
cancellations and if cars did show up
they would not be like in a great state
no one would turn on the AC and there'd
be fights on that so for us in some ways
building a superior experience was
somewhat like it was just doing some
hygiene work the standards were quite
low which meant that if we just didn't
do those things that the other uh
competitors had going on for various
reasons you would anyways be far ahead
but what the goal standard or what you
know what we build and offer is that
look you essentially are booking a taxi
because you have to go from one point to
another point right that should be
seamless it's great if you get a fancy
car or whatever but ultimately you want
a hassle-free ride and that means
everything from like the booking
experience being simplistic to the
driver not basically creating issues in
AC's being turned on if you don't want
music then no music if you want music
then have play your music we've put
water and tissues in the car that's just
because it just makes for a better right
and travel like you know in a city like
Bangalore you can't really do much about
traffic but if you have a like a 1H hour
commute like our thesis is that you know
we can't change traffic but we can kind
of make it at least a lot more
comfortable for you what I want you to
do is imagine the cost of the car being
100
rupees the 100 rupees cost how do you
recover the 100 rupees and when does it
start making money and how much money
will it make for you over the lifetime
of the car and at one point you will
move that car and get the fresh one like
the cost of maintaining the asset
becomes higher than the cost of
operating if the cost of the car is 100
you are firstly putting any of between 5
to 15 from your pocket um the rest is
being financed and then you have to see
what your monthly expenses look like and
kind of estimate what the monthly
Revenue can look like and hopefully
there's a gap right you earn a lot more
Revenue then you have expenses uh
operationally so if you assume a 5year
life if you are buying a car that let's
say is at 100 ideally you should be able
to make anywhere between 300 to 400 over
that fiveyear life there will be things
that you can get better estimates about
so for example emis will be known right
you will be like okay my Emi will be
let's say 7 rupees um each month and
that will be fixed so that's like a
known cost that will not change in your
modeling driver salaries also kind of
you can gauge and come to a fairly
reasonable estimate as to what that will
look like then there will be things like
charging which is essentially the cost
of running uh or cost of fuel uh in this
case so these will be the costs that you
know are there now then there will be
unknowns unknowns in the sense like okay
what will maintenance look like you can
kind of guess that but you will never
really know that till such time you
actually start doing it if the point is
to kind of build out a model before you
take a decision like this then there
will be some variability that you have
to introduce in that modeling and that
is what margins kind of allow you to do
it allows you to be like okay look I
have this much margin
even in the worst case so tell me this
so you said Word of Mouth definitely
works for you what happens when a
particular customer takes a ride how
does that help you get repeat and how
does that help you get new customers so
we get about 75% of our revenue from
repeat users which is insane we have
spent zero on marketing even after all
these months and our existing users go
out and recommend and bring new users
and there is no referral scheme they get
no benefit out of any of this yet this
has happened organically like this and I
think that is something that you know we
are very mindful of of the experience
that we provide like for us like that's
the true uh notar what's next for Sher
what does the next 12 months look like
for the business and what are you most
excited about it's building out a team
which is what I'm most excited about
which is also what is most important
right now for us so that is the most
timec consuming challenging and exciting
part uh that is going to unfold in the
next 6 to 12 months
[Music]
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