Meru Cabs, India’s largest radio cab service provider backed by Mumbai-based private equity major India Value Fund Advisor (IVFA), is set to expand business by adding 2,000 more cabs to its fleet this year. This move will take its fleet size to 7,000 by the year-end, according to Rajesh Puri, CEO, Meru Cabs.
Meru, owned by V-link Travel Solutions Pvt. Ltd, plans to enter two more cities-Chennai and Kolkata soon. Currently, it operates in Mumbai, Delhi, Hyderabad and Bangalore.
“Viewing the higher demand in metros, we plan to add 2,000 more cabs by September. As part of our entry into other cities, we have done a feasibility study for Chennai and Kolkata and the report is expected next month,” Rajesh Puri said. We also look at the possibility of entering cities like Pune and Ahmedabad, he added. Prior to Meru, Rajesh Puri, who was appointed as the CEO last November, worked as President (operations) at Tata Teleservices.
India Value Fund Advisors Pvt. Ltd., with more than $1.4 billion under management, invested an undisclosed amount in V-link Travel Solutions Pvt. Ltd. for a majority stake in 2006. With IVFA support, V-link launched Meru in 2007.
Meru Cabs, which earns a revenue of about Rs 220 crore, is expected to hit the profit zone make a profit this financial year, after three years of continuous loss making. “The huge depreciation as well as investment cost for IT services in cabs caused the loss. We hope to become a profitable company by this financial year,” Puri added.
The company’s proposed workshop with an investment of Rs 9-10 crore will be operational by September-October in North-West Mumbai. The workshop, expected to one among the largest in Mumbai, will provide services to retail customers also. The company is also in talks with other car manufacturers such as Toyota, GM and Hyundai for purchase of the cars. So far, Meru uses cars of Mahindra, Maruti and Tata. “Nothing has been finalized on the new purchase of cars. We have to assess the quality of the cars to change into a taxi than a personal vehicle,” Puri added.