How I Built A 25 Crore Luxury Taxi Startup Called Shoffr | GrowthX Inner Circle

Summary

In 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

00:00

🚗 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.

05:00

🛠️ 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.

10:01

🌐 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.

Keywords

💡Bangalore airport Market

The term 'Bangalore airport Market' refers to the commercial sector catering to transportation services specifically for passengers traveling to and from the Bangalore airport. It is a significant aspect of the video's theme as it represents a substantial market opportunity for the transportation business discussed. In the script, it is mentioned that the market was 'anywhere easily more than 1,500 cabs' before the opening of T2, indicating a high demand for transportation services.

💡fintech

Fintech, short for financial technology, is an industry that focuses on innovative technology and applications designed to enhance and automate the delivery of financial services. In the video, the speaker mentions being 'bit by the fintech bug in London,' highlighting their interest and eventual career shift towards fintech, which is a key part of their professional journey and the narrative of the video.

💡EV (Electric Vehicle)

EV stands for Electric Vehicle, which is a vehicle that uses electric motors and batteries for propulsion rather than a traditional internal combustion engine. The script discusses the speaker's experience with EVs, specifically the Nexon Eevee, and how the lower running costs and environmental benefits of EVs inspired the business model for their company, Schofer.

💡Schofer

Schofer is the name of the premium ride-hailing service or taxi service company founded by Vikas Bardia, as mentioned in the script. It represents the core subject of the video, illustrating the entrepreneurial journey and the business's focus on sustainability and premium customer experience within the electric vehicle cab service industry.

💡sustainability

Sustainability in the context of the video refers to the ability to maintain operations over the long term without depleting resources or causing environmental harm. Schofer aims to solve for sustainability while maintaining a premium customer experience, which is a key insight into how the company differentiates itself in the market by focusing on environmentally friendly practices.

💡market opportunity

Market opportunity refers to the potential for growth and profit within a specific market. The script discusses the significant market opportunity in India for taxi services, particularly in Bangalore, with various segments such as airport transfers, corporate travel, outstation, and intra-city markets, which are all potential areas for Schofer to capitalize on.

💡Revenue model

A revenue model is a business framework that describes how a company intends to generate income. In the video, the discussion around designing a revenue model is part of the GrowthX demo day, where strategies for understanding customer acquisition, onboarding, and retention are shared. This concept is crucial for the success and scalability of Schofer and similar startups.

💡Gold standard of rides

The 'gold standard of rides' is a term used by Schofer to describe their commitment to providing a high-quality service that sets a new benchmark in the ride-hailing industry. The script explains that this involves a seamless and hassle-free experience for customers, from booking to reaching their destination, with attention to details such as car condition, driver behavior, and amenities provided during the ride.

💡customer acquisition

Customer acquisition is the process of attracting new customers to a business. The video emphasizes the importance of understanding customer acquisition strategies, which is part of the GrowthX demo day's focus. For Schofer, customer acquisition is also discussed in the context of word-of-mouth referrals, which has been a significant driver of their business growth without any marketing spend.

💡scaling

Scaling refers to the process of increasing the size of a business operation while maintaining or improving efficiency. In the script, the speaker discusses the challenges of scaling a business in a financially sustainable manner, which is a core part of Schofer's strategy and a key learning from their research and operational experience.

💡maintenance

Maintenance in the context of the video pertains to the upkeep and servicing of the vehicles in Schofer's fleet. It is an important cost consideration in the financial modeling of the business, as the script mentions the need to estimate and account for maintenance costs over the lifetime of the vehicles to ensure the sustainability of the business model.

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

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