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Forsche: Taxi Service In Mumbai for Women By Women
July 4, 2008 |
I watched this short piece on Current TV a while ago. While I was intrigued by it, I wasn’t blown away with the business model. First, it’s hard to scale and secondly, there are no barriers to entry. If this takes off, there will definitely be new entrants. But looks like Forsche has had a great run - they raised Rs 14 lacs to fund the venture, and with 18 taxis, has managed to break even in less than six months
CUSTOMER NEED (high) - There’s definitely a need, as the working women population keeps growing and as safety on the road becomes a concern for women of all ages.
WILLINGNESS TO PAY (medium/high) - Forsche charges Rs 200 per hour, according to this Hindu article. Our services are 20 per cent higher than other taxis, claims the founder of Forsche, Revathi Roy.
ATTRACTIVE MARGINS (medium/high) - While this is a CAPEX intensive venture, upfront investment to purchase the cabs, the ongoing fixed cost is not very high. Each driver takes home Rs.9,500 per month. As a 24 hrs operation and assuming each driver works a 12 hr shift, Forshe should breakeven on the salary expenses within the first week of each month. I’m guessing the second biggest expense would be gas/petrol
But something hit me recently about Forsche - this is not just a novel cab service concept. Imagine the thousands of female passengers that get on and off the Forsche cabs everyday, and right there you’ve a very niche, targeted demographic. They can be directly targeted with samples/products in the taxi, and through magazines and TV screens. Forsche has managed to create a new vertical for direct marketing to an affluent, female demographic and a secondary revenue stream (in the form of advertising) for the venture!
