Summary of Employee Transport Service Sector in India

INTRODUCTION

    The employee transport services (ETS) or corporate employee transport services has been broadly divided into two categories intercity & other one is daily office commute i: e between home to office (Intercity) B2B segment.There is a new trend emerging recently which is called as App based AC or NON-AC bus or cab services for office commute which generally caters to the B2C market. In this report we are going to cover the local movement of daily office commuters in metro & semi metro locations. 

The major metro cities i: e Mumbai, Pune, Gurgaon, Bangalore etc.…. which are commercial hubs of India are increasingly using ETS services for their employees. There are many reasons behind this like lack of first mile & last mile transportation, crowded public transport systems etc. However, the IT/ BPO/ KPO sector are using these services purely due to odd working hours & safety of the employees, most importantly female employees.

OVERVIEW OF SECTOR

    As per the various estimates received this sector provides the direct & indirect employment oppor-tunities to around 25 to 30 million individuals in India. Most importantly it provides self-employment opportunities specially to drivers who can own the vehicle worked under the driver cum owner module. The affiliated industry like escort guard services for female employees in late hours also highly attributed its growth with this sector. Based on the various reports available in the market the present value of the sector is around USD25 billion & expected to grow around 5% to 6% (CGAR).

Employee Transport Ecosystem Component

ETS Ecosystem

CHARACTERISTIC OF SECTOR

• Highly Fragmented :- This is the most common aspect of this industry. Since there is no entry barrier any one can enter in this industry with 1 or 2 vehicles, however experience does matter while getting selected for any contract.

• No Major Player Or Brand Involved :- Many of the vendors or agencies associate with this business are either proprietors of SME organisation. Recently few startups do invest in App based services (B2C) but its not sufficient enough to cover the market due to variety of reasons.

• Control of localites in certain areas :- There are certain pockets in the above-mentioned cities wherein this business is unofficially reserved for localities. Any newcomer in this business obstructs these individuals with all means.

• Very high risk :- This business majority of the times operates in odd hours so in context of safety & security of users and drivers is very risky affairs.

• Regulated by law enforcement authorities :-Due to many horrific incidents with the women employees in the past the law enforcement authorities do keep a constant check on this industry by way of new rules & regulations.

• Highly competitive business :- The most furiously fought market. Return on investment is limited up to 2% to 3%. but many corporate (users) do understand the challenges & accommodate very reasonable commercials to the vendors

BENEFITS

Source-https://www.canva.com/

ETS (B2B Segment)

    These are the most experienced service providers in the domain of ETS. They are basically aggregators of vehicles & have the right mixture of own & hire vehicles with them. The most common vehicles are buses which have the capacity from 17 seats to 49 seats & in small segment vehicles starts from 4 to 12 seats capacity. The average revenue earning (Turnover) of vendors ranges between INR 30 CR to INR 70 CR. Some ETS vendors do offer value added services such as security escort in odd hours, fleet management technology and employee commute technology platform. They are also champions in handling & liaising with various law enforcement authorities & localities issues. The major user for these services is manufacturing, BFSI, BPO/KPO, MNC & IT sector. As per the expert the successes of business largely depend on the right combination of own & outsource vehicles. These vendors generally operates in five different module of billing.

OPERATING MODULE

Source- https://pixabay.com/

Trip Base Module - The billing charges will be base on the number of trips done for  the  day. Usually minimum 2 to 3 trips are mandatory for the cabs & 2 trips are mandatory for bigger vehicles. 

FTE Module - The charges will be subject to number of employee travelled per day. The minimum employee count starts from 900 plus from one location. This is the most economical module of operation but most difficult to operate.

Kilometre Module - The billing will be done as per the kilometres cover for the day. However, the minimum guarantee of kilometres is required.

Package Billing Module - In this module the fixed package will get decided between user and vendor. The package amount will be base on number of days, hours per day, kilometres for the month etc..

  

List of few preferred vendors in Mumbai & Pune region.

1. RN Cabs Pvt. Ltd.  :– Good balance of own & hire vehicle mix. offer fleet management & employee management technology platforms too. It also has ties with security agencies for employee escort services. Sole players in Mumbai & Pune offer FTE base model.

2. Aaron Tours Pvt. Ltd :– Base out of Vikhroli, Mumbai. Big fleet size. Majority of the vehicles are owned by the company. Considered as king in bus services in Mumbai.

3. Milind Travels :- Holds small pie of business but quality conscious. Turnaround time & involvement of management is appreciable.

4. Sai Travels :– Operating out of Chembur. Mumbai. Very few customers but very quality conscious. Having great experience of handling bus services also having good experience of handling long haul bus service too.

5. Pais Auto Pvt. Ltd – Among top 10 player deals in premium car segment. The fleet size around 200 vehicles. 

APP BASE AC & NON – AC BUS SERVICES (B2C)

This is a new trend that has emerged recently. The players in this segment majorly target the B2C segment. Fleets and drivers are completely outsourced. The seat capacity of the vehicle starts from 17 Seats to 49 seats. Services are available for general shifts only I;e 7:00 HRS to 20:00 Hrs, basically catering to the office timings for commuting. These buses are either AC or NON -AC based on the location and the preferences of the customers. As per the reports available the revenue of the industry is around INR 350 CR. As per the claim made by the various players the daily ridership on Pan India level is around 2 lakhs. The major benefits are multiple bus routes and good frequency during office hours. Though it is a good and comfortable alternative to public transport, it is a little expensive. As per my observation, this product is crafted for the individuals who commute with their private vehicles. It is relatively the best alternate option for car users taking in account the first & last mile commute challenges which are resolved by these players by customising the route. Currently there are no definite numbers available but this has tremendous scope ahead.Names of the most preferred services for Mumbai & Pune.

• Cityflo :-A tenured and well experienced player in the industry. Cityflo operates around 9 plus routes with a fleet size of 200 vehicles. They are known for superior services and no compromises when it comes to service quality.

• Ford Mobility :- Having pan India presence. New player in the segment.

• Shuttl :- HO base out of Goregaon. Major players in the industry. Having huge fleet size. Pan India level presence. First player who has touched INR 100 CR revenue.
  
  

Source:- https://pixabay.com/

TRENDS IN ETS

Technology

Previously ETS operations were not organised. Traditionally all were relied on paper (log sheet/ trip sheet). Major problem was kilometre reading. However, use of GPS systems has largely helped this sector to organise their operation. But other security related concerns were not addressed in detail. In last few years due to constant evolution in technology the dynamics of ETS has changed drastically. The introduction of MaaS & SaaS systems has given a lot of cost saving & optimise the operation. Today there are many companies offering these services. Beside this many IT companies had developed their own technology platform too. This technology helps to optimise the fleet usage and managed the employee mobility. The major players are listed down below for your reference.

1.Moveinsync – Operating from Banglore. Pioneer in ETS technology in India. Market leader in this segment.

2.Klevermind – Base out of Delhi. Having expertise in fleet management technology solutions & employee transportation management

Electric Vehicle (EV)

Many organisations are showing interest to explore the use of these EV  to compliant with go green initiative. But, the cost of vehicles and unavailability of related infrastructure is the biggest challenge which needs to be addressed. There are two automobile companies i:e TATA Motors and Mahindra & Mahindra who have launched their EVs for fleet purposes. The range of the vehicle starts from 110 Kms to 200 Kms. per charge. The time to recharge the vehicle is 8 hours for slow charging & 90 minutes for booster charging but it has some limitations. These EVs will definitely make the major impact in the coming days

Source :Image by mohamed Hassan from www.pixabay.com

So that’s all from my side. Hope you have found this article informative. Do share and comment. Your feedback are valuable to me. Keep watching this space for more such article

(Disclaimer – Views expressed in this article are purely based on the interaction with the industry expert & reports available in the public domain. Users of this information are requested to do proper due diligence before taking any commercial or investment decision. The blogger will not be responsible for loss/liability arises due to use of this information)