Market study and recommendation: Ground transportation industry

Abstract

Company X is a major technology company. It is a big multinational firm with numerous employees working in its business units located at multiple locations across India. The nature of its business necessitates providing conveyance service to the employees which have led to a fairly big in-house transport management team. Things were running smoothly until recently when it started seeing a steep escalation in its operational costs. As this event coincided with the rapid rise of taxi aggregator service firms like Ola and Uber, it was hypothesized that their exponential growth has affected the smaller/local players in the transport industry. The alluring incentive structure of cab aggregators would have attracted many drivers and vehicles, making them scarce for the conventional transporting agencies, the local players. We started with this hypothesis and studied the dynamics of ground transportation industry at breadth. This helped us understand various industry segments and the area we needed to focus upon. Then we analyzed existing companies giving taxi aggregation services, their operations, incentive structures, and the way it has evolved. The way they operate and reward drivers have changed vastly with time. Although transportation industry was impacted initially by the entry of Ola and Uber, the effect has settled by now, which suggested that our initial hypothesis is wrong.